NYC Publishes Proposed Pied-à-Terre Tax List: Who Could Pay—and Why Rented Apartments May Be Exempt

Owning several apartments does not automatically trigger the new surcharge. The key question is whether each property is used as someone’s primary residence.

The New York City Department of Finance has published a supplemental property value roll connected to the city’s new non-primary residence property surcharge, commonly described as a pied-à-terre tax.

The official roll was published on July 24, 2026, and will remain available for public inspection through December 31, 2026.

However, the Department of Finance has issued an important clarification: appearing on the roll does not necessarily mean that a property owner will have to pay the surcharge. The list “includes, but is not limited to,” properties that may ultimately be subject to the tax.

Which properties could be affected?

For the 2026–2027 and 2027–2028 property tax years, the surcharge may apply to:

• one-, two-, and three-family homes valued by the Department of Finance at $5 million or more;
• condominium and cooperative apartments valued by the Department of Finance at $1 million or more;
• qualifying properties that are not used as a primary residence.

The important point is that the surcharge is not based solely on how many apartments a person owns.

Instead, the city is supposed to examine how each qualifying property is being used.

What happens when one owner has four apartments?

Suppose one landlord owns four expensive apartments in New York City.

The owner does not automatically owe the pied-à-terre surcharge on all four apartments merely because they own multiple properties.

Each apartment should be considered separately:

• If the owner lives in one apartment as their primary residence, that apartment may qualify for an exemption.
• If a tenant occupies the second apartment as the tenant’s primary residence, that apartment may also qualify for an exemption.
• If another tenant permanently occupies the third apartment, it may also be exempt.
• If the fourth apartment remains vacant or is used by the owner only occasionally, it may be subject to the surcharge if its Department of Finance value meets the applicable threshold.

The Department of Finance states that the surcharge generally will not apply when a property is used as a primary residence by the owner, a tenant, an immediate family member of the owner, or certain individuals holding a majority interest in an entity that owns the property.

Therefore, an occupied rental apartment is not necessarily considered a taxable “second home” simply because its landlord owns several units.

Proof of a tenant’s primary residence may be required

An exemption may not be automatic.

Owners who receive a Department of Finance notice may have to demonstrate that an apartment is genuinely occupied by a tenant as the tenant’s principal residence.

Depending on the circumstances, supporting documents may include:

• a current lease or sublease;
• evidence of rent payments;
• a utility bill;
• renter’s insurance documentation;
• a tenant affidavit;
• tax or government records showing the apartment address.

A landlord should not ignore a notice merely because the apartment is occupied. Failure to submit the required exemption application and supporting documents could complicate the process.

How much is the surcharge?

For one-, two-, and three-family homes, the published rates are:

• 0.8% for properties valued from $5 million to less than $15 million;
• 1.05% for properties valued from $15 million to less than $25 million;
• 1.3% for properties valued at $25 million or more.

For condominium and cooperative units, the published rates are:

• 4% for units valued from $1 million to less than $3 million;
• 5.25% for units valued from $3 million to less than $5 million;
• 6.5% for units valued at $5 million or more.

These percentages are based on the market value assigned by the New York City Department of Finance, which may differ from a recent purchase price or the owner’s estimate of the property’s value.

Important exemption deadlines

Owners of qualifying residential homes and condominiums have until:

August 21, 2026

to submit a surcharge exemption application.

Owners of cooperative apartments have until:

August 24, 2026.

The city advises owners to use its eligibility guidance and provide the requested evidence showing that the property is used as a primary residence.

Why is the published list so large?

The supplemental market value roll should not be described as a final list of people who will definitely pay the tax.

It is a broader property roll related to implementation of the surcharge. The Department of Finance explicitly states that the roll includes, but is not limited to, properties that may be subject to it.

That means some owners may appear on the list even though their properties are ultimately exempt because they are occupied by owners, tenants or qualifying family members.

The roll may also include records that require corrections, updated ownership information or additional documentation.

What if the owner disputes the property value?

An owner who disputes the Department of Finance valuation may have the right to file an appeal with the New York City Tax Commission.

For the 2026–2027 and 2027–2028 tax years, the Tax Commission lists the following general surcharge appeal deadlines:

• March 1, 2027, for Tax Class 2 properties;
• March 15, 2027, for Tax Class 1 properties.

Different procedures may apply depending on whether the owner is challenging the property valuation, the denial of a primary-residence exemption, or both.

How much revenue could the tax generate?

The New York City Comptroller’s Office estimated that a pied-à-terre tax could potentially generate as much as approximately $510 million annually.

However, the Comptroller warned that actual revenue could fall to approximately $340 million to $380 million after accounting for exemptions, including exemptions for rented properties, as well as valuation disputes and changes in owner behavior.

The Comptroller estimated that approximately 11,200 high-value second-home properties could potentially be affected under the modeled structure.

What this means for Brooklyn property owners

Most ordinary apartments in Brighton Beach and surrounding Brooklyn neighborhoods will not meet the Department of Finance valuation threshold.

Nevertheless, notices could reach owners of:

• high-value condominiums;
• large or combined apartments;
• units owned through LLCs or trusts;
• properties where the owner’s mailing address differs from the property address;
• apartments that the city has not correctly identified as occupied by a permanent tenant.

Cooperative apartment owners should be particularly careful because the value of an individual co-op unit may be calculated through the building’s overall assessment and the shareholder’s allocation of shares.

The bottom line

Owning four apartments does not automatically mean paying the new surcharge on four apartments.

The central question is whether each qualifying property is being used as someone’s primary residence.

A high-value apartment occupied by a permanent tenant may qualify for an exemption. A comparable apartment that remains vacant or is used only occasionally may be subject to the surcharge.

Property owners who receive a Department of Finance notice should verify the city’s records, gather evidence of occupancy and submit the appropriate exemption application before the August deadline.

The new surcharge is intended to target high-value non-primary residences—not every apartment owned by a landlord.

How Much Does the Owner of a Vacant $5 Million NYC Apartment Already Pay?

Even before any new pied-à-terre surcharge is added, the owner of a vacant New York City apartment worth approximately $5 million may already pay around $100,000 to $120,000 per year in property taxes and building charges.

For a condominium, a typical annual cost may look like this:

Expense	Estimated Monthly Cost	Estimated Annual Cost
NYC property taxes	$3,500–$5,000	$42,000–$60,000
Common charges and building maintenance	$3,500–$5,000	$42,000–$60,000
Estimated total	$7,000–$10,000	$84,000–$120,000

In higher-service luxury buildings, the combined cost can exceed $125,000 per year, even when nobody lives in the apartment.

These expenses may pay for doormen, security, elevators, cleaning, building staff, heating and cooling of common areas, insurance, repairs, reserve funds, gyms, swimming pools and other amenities.

Who receives the money?

The owner does not pay the entire amount directly to New York City.

Property taxes are paid to the City of New York. These funds support the municipal budget, including schools, police, sanitation, transportation and other public services.

Common charges are paid to the condominium association or building management. They cover the operation and maintenance of the private building.

For a cooperative apartment, the structure is different. Co-op owners generally pay one monthly maintenance charge that usually includes their share of the building’s property taxes, mortgage obligations, staff costs and operating expenses.

Why the tax is not calculated as a percentage of the $5 million sale price

A $5 million apartment is not taxed by simply multiplying its market price by New York City’s published property-tax rate.

The city first determines a separate assessed value. The official tax rate is then applied to that assessed value, subject to New York City’s valuation rules, assessment caps and classifications.

As a result, the annual property-tax bill for a $5 million condominium may be approximately $40,000 to $65,000, rather than hundreds of thousands of dollars.

Examples of existing annual costs

Recent luxury Manhattan listings show how widely expenses can vary:

• One apartment priced around $5 million had property taxes and common charges totaling approximately $127,000 per year.
• Another apartment priced just under $5 million carried combined annual charges of approximately $115,000.
• A lower-charge apartment priced slightly above $5 million had combined annual expenses of approximately $74,000.

The actual amount depends on the building, location, size of the apartment, available amenities, tax abatements and the city’s assessed value.

Additional expenses for a vacant apartment

The estimate of $100,000 to $120,000 generally does not include:

• apartment insurance;
• electricity and climate control;
• repairs inside the unit;
• special building assessments;
• property-management or inspection services;
• mortgage interest and principal payments;
• broker commissions or legal expenses.

After these additional costs are included, the actual cost of holding a vacant $5 million apartment could reach approximately $110,000 to $140,000 per year, excluding mortgage payments.

How much could the proposed surcharge add?

Under the proposed non-primary residence surcharge described by the Department of Finance, a condominium valued by the city at $5 million or more could face a surcharge rate of 6.5% of the Department of Finance market value.

If the city assigned the apartment a full taxable market value of exactly $5 million for purposes of the surcharge, the additional charge could theoretically reach:

$5,000,000 × 6.5% = $325,000 per year.

That would be added to the property taxes and building charges the owner already pays.

Under that simplified example, the total annual carrying cost could potentially rise from approximately $100,000–$120,000 to approximately $425,000–$445,000, before insurance, utilities, repairs and mortgage payments.

However, the actual surcharge would depend on the final Department of Finance valuation, exemptions, occupancy status and implementation rules.

Who may avoid the new surcharge?

The proposed surcharge is not intended to apply automatically to every owner of several apartments.

A qualifying apartment may be exempt when it is used as a primary residence by:

• the owner;
• a permanent tenant;
• an immediate family member;
• certain qualifying owners or beneficiaries of an LLC, partnership or trust.

Therefore, a landlord who owns four apartments would not necessarily pay the surcharge on all four. If three apartments are occupied by permanent tenants and one remains vacant as a second home, only the vacant apartment may potentially be subject to the additional charge.

The bottom line

The owner of a vacant $5 million New York City condominium may already spend roughly $100,000 to $120,000 every year on ordinary property taxes and building charges.

The proposed pied-à-terre surcharge could potentially add hundreds of thousands of dollars to that amount for a high-value apartment that is not used as anyone’s primary residence.

N. Yorks

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