NYC tax math · Non-primary residences
Know the surcharge before it becomes a carrying cost.
New York City’s non-primary-residence surcharge can turn a second home into a materially different ownership decision. Model the annual charge from the Department of Finance market value, see the bracket cliffs, and carry the result into your broader ownership-cost analysis.
Pied-à-terre tax calculator
Convert a city valuation into an annual surcharge.
Use the market value shown by the Department of Finance. If you only know the purchase or asking price, estimate mode can bridge the gap for planning—but it is not a substitute for the DOF value.
Estimated annual surcharge
$96,000
4.00% of $2,400,000 in DOF market value.
- Rate applied
- 4.00%
- Monthly equivalent
- $8,000
- Both initial-phase years
- $192,000
Department of Finance values, residency determinations, current law and court orders control the actual bill. This is an educational estimate—not tax or legal advice.
The bracket cliffs
Rate schedule
| DOF market value | Rate | Entry charge |
|---|---|---|
| Below $1M | 0.00% | $0 |
| $1M to under $3M | 4.00% | $40,000 |
| $3M to under $5M | 5.25% | $157,500 |
| $5M and above | 6.50% | $325,000 |
2026–27 and 2027–28 DOF rates
The current rate schedule, in crawlable text.
For the first two property-tax years, Department of Finance applies the rate to the full market value once the property reaches an inclusive threshold.
| Property type | DOF market value | Rate | Charge at band entry |
|---|---|---|---|
| Condo / co-op | $1,000,000 or greater, but less than $3,000,000 | 4.00% | $40,000 |
| Condo / co-op | $3,000,000 or greater, but less than $5,000,000 | 5.25% | $157,500 |
| Condo / co-op | $5,000,000 or greater | 6.50% | $325,000 |
| 1–3 family home | $5,000,000 or greater, but less than $15,000,000 | 0.80% | $40,000 |
| 1–3 family home | $15,000,000 or greater, but less than $25,000,000 | 1.05% | $157,500 |
| 1–3 family home | $25,000,000 or greater | 1.30% | $325,000 |
Source: NYC Department of Finance non-primary residence surcharge guidance. Threshold wording is “or greater.”
Read the tax clearly
The surcharge is a cliff, not a ramp.
Most property taxes are discussed as percentages. This one is better understood as a series of ledges. Once a covered property reaches the next value band, the new rate applies to the entire DOF market value. That makes the assessment itself part of the acquisition analysis.
The city’s number sets the starting point.
A contract price does not automatically become the surcharge base. The relevant number is the Department of Finance market value.
Second-home use is the threshold question.
The surcharge is aimed at qualifying homes not used as a primary residence. Entity ownership does not make that question disappear.
A recurring charge belongs in the carry.
For a buyer planning a five- or ten-year hold, the annual surcharge should sit beside taxes, common charges, financing and upkeep—not outside the decision.
Work the numbers
Two valuations. One small step. A very different bill.
Consider two non-primary-residence condos in the initial phase with DOF market values only $150,000 apart.
Unit A
- DOF market value
- $2,950,000
- Rate
- 4.00%
- Annual surcharge
- $118,000
Unit B
- DOF market value
- $3,100,000
- Rate
- 5.25%
- Annual surcharge
- $162,750
The $150,000 valuation difference changes the annual estimate by $44,750. The point is not that one unit is automatically better; it is that a buyer near a threshold should understand the DOF value before treating two otherwise comparable homes as carrying the same cost.
Before you buy
Put the surcharge inside the ownership decision.
Find the DOF value.
Start with the current Department of Finance market value and confirm how the unit is treated. For a co-op, use the value in your DOF letter or the unit-level value on the supplemental market value roll—not the building-level figure on the co-op’s property-tax bill.
Confirm the use.
Primary-residence, tenant, family, entity and trust facts can change the outcome. The calculator cannot make that legal or factual determination for you.
Model the complete carry.
Once you have an annual estimate, move it into True Carry Cost with financing, taxes, building charges and upkeep.
Watch the litigation.
The law remains in effect, but implementation and constitutionality are being litigated. The September 29 ruling in O’Brien v. City of New York addressed the rollout and notices; the City appealed. Read Reuters’ report on the ruling and appeal, and recheck official DOF guidance before a closing or filing decision.
Got a DOF letter?
A notice is not the same thing as a bill.
DOF’s own guidance separates potential exposure from actual liability. If you received a letter, respond by the deadline even if you believe the property is exempt.
A letter does not mean you owe the surcharge.
Some primary residents received letters because DOF did not have enough information on file to confirm residency, including cases involving condo/co-op abatements without a sufficient tax filing.
Appearing on the roll does not establish liability.
DOF says the supplemental market value roll includes properties beyond those ultimately subject to the surcharge. Properties DOF believes are subject receive direct notice and an opportunity to respond.
Value disputes go to the NYC Tax Commission.
If you believe DOF’s market value is wrong, you can challenge the value with the Tax Commission. The Commission can consider primary residency only when residency is raised together with a value challenge.
Billing: if the property is subject to the surcharge, DOF says the charge will appear on the property-tax bill due January 1, 2027.
Policy background
Why the City expected the surcharge to matter.
An April 30, 2026 NYC Comptroller fiscal note—published before the final law took effect—estimated that an earlier proposal could produce roughly $500 million before exclusions and behavioral changes, and roughly $340 million to $380 million after modeled adjustments. The enacted law and current DOF rate schedule differ from the proposal analyzed in that report, so the calculator uses current DOF rules, not the Comptroller’s earlier rate assumptions.
Frequently asked questions
Pied-à-terre tax questions, answered.
Who may be subject to the NYC pied-à-terre surcharge?
For FY 2026–27 and 2027–28, qualifying non-primary residences can include condo and co-op units with DOF market value of $1 million or more and one-to-three-family homes at the applicable $5 million threshold.
Is it based on what I paid?
No. The surcharge is based on Department of Finance market value. Purchase price is useful only as a rough estimate when the official value is not yet known.
Are the rates marginal?
No. This calculator applies the relevant bracket rate to the full DOF market value once the threshold is reached.
Does an LLC or trust automatically avoid it?
Not by itself. An entity-owned home can be exempt if it is the primary residence of one or more individuals who collectively hold a majority interest in the owning entity, an immediate family member of the owner or majority holder, or the sole beneficiary or beneficiaries of a trust.
What is happening with the court cases?
In O’Brien v. City of New York, a September 29, 2026 trial-court ruling challenged the City’s implementation and notice process. The City appealed and the rollout continues while the appeal is pending. Separate lawsuits challenge the surcharge itself. Reuters summarized the ruling and appeal.
How is this different from the mansion tax?
The mansion tax is a one-time transfer tax at purchase. The non-primary-residence surcharge is recurring when the statutory requirements apply.
When would the first surcharge appear on the tax bill?
DOF says charges for properties subject to the surcharge will appear on the property-tax bill due January 1, 2027.
Can I carry this into True Carry Cost?
Yes. Use the handoff above to take the annual estimate into ELIKA’s longer-term ownership-cost calculator.
Second homes, considered
Buy the New York home—and know what it carries.
The surcharge is one line in the decision. An ELIKA advisor can put it beside the actual building, carrying costs, financing and intended use before you commit.
Last Updated on October 6, 2026 by Gea Elika