The notice does not tell you the rate. It tells you what the Department of Finance thinks your property is worth and gives you a deadline. The rate, the threshold, and the five ways to be exempt are in the statute and the rules, and this page puts them in one place, with the numbers, so you can read your own notice and know what it means before you decide what to do about it.
What is the pied-à-terre tax rate in NYC?
There are two rate ladders, and which one applies depends on what the property is. The surcharge is calculated on the Department of Finance market value, which is not a sale price, and once a property crosses its threshold the rate applies to the entire value, not only the part above the line. The rule preamble says so in as many words: if a property’s valuation exceeds the threshold, the entirety of the property’s value is subject to the surcharge.
Condominium and cooperative units, $1 million and above
- $1,000,000 to $3,000,000: 4.00% of market value each year
- $3,000,000 to $5,000,000: 5.25%
- $5,000,000 and above: 6.50%
One-, two-, and three-family homes, $5 million and above
- $5,000,000 to $15,000,000: 0.80% of market value each year
- $15,000,000 to $25,000,000: 1.05%
- $25,000,000 and above: 1.30%
These are the Phase One rates, in force for the 2026-27 and 2027-28 tax years. From July 1, 2028, condominiums and cooperatives move to a comparable-sales valuation and a single $5 million threshold with the homes ladder.
How much would I actually pay?
A worked example from one notice, anonymous: a one- to three-family home the Department of Finance valued at $5,268,000 carries an annual surcharge of $42,144.00, which is 0.8% of that value to the cent. The same market value on a condominium or cooperative unit would sit in the other ladder entirely, at 6.5%, and the property type is therefore the whole question.
The property type is decided by what the property is, never by its tax class. That distinction is load-bearing in one specific case: a condominium unit inside a one- to three-unit building sits in tax class 1, but it is still a condominium unit, so it takes the $1 million test and the condominium rates. Reading it as a house, with the $5 million threshold, tells such an owner the surcharge does not reach them when it does.
Two more things the notice does not spell out. Existing abatements, credits and exemptions do not offset the surcharge. And a $1 million Department of Finance market value is well below open-market prices for class 2 property, because the Department values it by an income method; a $1 million DOF value has been described as corresponding to roughly a $5 million apartment.
The free instant check does this arithmetic for your specific lot: enter the address and it shows the Department of Finance value and the annual surcharge if no exemption is granted, without an account.
Who is exempt from the pied-à-terre tax?
The surcharge is not owed when any one of five people uses the property as a primary residence, judged as of the taxable status date, January 5, 2026:
- The owner. You live in the unit and it is your primary residence; the Department of Finance simply does not have that on record yet.
- A tenant or subtenant. A renter or subtenant who uses the unit as their primary residence qualifies the property. The tenant must be a natural person, so an LLC tenant cannot establish primary residence, and there is no one-year lease requirement; the final rule added documentation paths for month-to-month tenants and for spouses of owners.
- One or more individuals who collectively hold a majority interest in the LLC, corporation, or partnership that owns the property. This is the path most entity-owned units rely on. Multi-tier entity structures cannot establish primary residence.
- An immediate family member of the owner or of a majority interest holder, living there as their primary residence.
- The sole beneficiary of a trust that holds the property. Multiple individuals may together be the sole current beneficiaries; a contingent or future interest does not automatically disqualify.
Primary residency is also deemed to continue for one year after a death, and through a continuous hospitalization or a temporary nursing home or rehabilitation stay, with proof of the event and of prior residency.
What documents does the Department of Finance want?
The exemption is not automatic. Somebody has to tell the Department of Finance which relationship applies, with documents, through the portal at nyc.gov/npsurcharge, by September 18, 2026. Under the rule as amended on August 3, 2026, the core proof is one of the most recent federal or state income tax return showing the address, or a driver’s license or other DMV-issued identification; only where neither is available does it become both a voter identification card and one other proof. A file built to the older two-of-three standard still satisfies the new one.
On top of that core proof: family relationships need a marriage or birth certificate or an affidavit; the tenant path needs the lease plus the tenant’s own residency documents; entities and trusts need their organizational documents plus an officer or trustee affidavit. Owners may file an amended return before appealing.
What if the value on the notice is wrong?
That is a different route from the exemption. Value challenges go to the NYC Tax Commission on Form TC107, by March 1, 2027 for class 2 or March 15, 2027 for class 1, or 30 days after the Department of Finance’s final determination, whichever is later. A Tax Commission determination controls and bars the Department of Finance from reconsidering, and choosing that route replaces the direct exemption application, so the two are not filed casually together.
The penalty for a materially inaccurate certification that would lower the surcharge is 300% of the difference, capped at half the surcharge, with a six-year audit window. Get the relationship and the documents right the first time.
What does it cost to ask MGNY?
Nothing. A real person answers at (212) 343-1111, right away, and the consultation is free. You engage us only if you want the response handled for you. MGNY has worked NYC property tax since 2008, across 900+ tax abatement developments, with $23.6M in tax refunds secured for owners.
Know your number before September 18.
The free instant check shows the value the Department of Finance put on your property and what the surcharge would cost each year, free and without signing in.
Then call (212) 343-1111. A real person answers right away, the consultation is free, and you engage us only if you want the response handled for you.
Sources: NYC Department of Finance, nyc.gov/npsurcharge, program page and portal, read August 2026; Tax Law Article 30-C; the adopted rule at 19 RCNY Chapter 62 as amended August 3, 2026; the NYC Tax Commission surcharge appeal page; client alerts from Sullivan & Cromwell, Holland & Knight, Rosenberg & Estis and Day Pitney, read July and August 2026.
