The NYC Pied-à-Terre Tax: who pays, the rates, and how to check your building

What is a pied-à-terre?

Pied-à-terre is French for "foot on the ground." In NYC real estate it means a secondary residence held by someone whose primary home is elsewhere — most often a Manhattan condo or co-op owned by an out-of-state or overseas buyer. The pied-à-terre tax is the city's new charge aimed squarely at those non-primary units.

Who has to pay the pied-à-terre tax?

The single defining test is primary residence. If the unit is your actual main home, the surcharge does not apply. If it's a second home, a part-time crash pad, an investment unit, or an apartment you kept after moving your main home elsewhere, you're in scope once the value threshold is met.

A few points owners get wrong:

• An LLC or trust does not shield you. The surcharge is property-based and looks through to the beneficial owner; New York's LLC transparency rules mean the city can see who's behind the entity.
• Only one home can be your primary residence. Owners who live in NYC but also own a non-primary unit can be caught — even if they already pay NYC and New York State income tax.
• The trigger is the city's value, not your purchase price — the NYC Department of Finance (DOF) valuation, which for condos and co-ops runs far below market.

How much is the pied-à-terre tax? (2026 rates & brackets)

Rates are graduated: value below the threshold isn't taxed, and only the portion above each bracket's threshold is taxed at that bracket's rate. Two schedules apply in Phase 1 (the fiscal years beginning July 1, 2026 and July 1, 2027).

Worked examples (Class 1, where DOF value approximates market): a $6M home owes about $8,000 — 0.8% on the $1M above the $5M threshold. A $20M home owes about $132,500.

Phase 2 (2028 onward)

From the fiscal year beginning July 1, 2028, DOF is expected to revalue condos and co-ops using a market-based, comparable-sales method. At that point the threshold moves to $5M for all property types, and condos and co-ops shift to the same 0.8% / 1.05% / 1.3% schedule as homes — but applied to values close to true market. A unit that owed little in Phase 1 can owe substantially more once it's valued at market.

Key dates

Exemptions: how to avoid the pied-à-terre tax

A covered property is not taxed when it qualifies for one of these:

• Primary residence of the owner — or of the owner's parent or child.
• Genuine year-round rental to a tenant who uses the unit as their NYC primary residence, under a bona fide lease.
• Carve-outs: unsold sponsor units under an active offering plan, and new construction or conversions without a certificate of occupancy.

Proof of primary residence can include a New York State resident income tax return listing the address, a STAR exemption, or a state homeowner tax credit. Residency is self-certified when you respond to the DOF notice — but the Department can impose penalties of up to 50% of the surcharge for negligent or bad-faith misrepresentation, so keep an audit trail.

Co-ops and LLCs: the mechanics that trip people up

A co-op building is a single tax lot, so a non-primary unit's surcharge is added to the building's bill, not the individual shareholder's. Boards will likely need to amend the proprietary lease or add a special-assessment provision so primary-resident owners don't subsidize pied-à-terre owners. For LLC and trust ownership, the tax looks through to the person behind the entity — holding title in an LLC changes nothing about who owes it.

What it means if you own — or buy — NYC condos

For a non-primary owner, this is a recurring carrying cost that only grows in Phase 2, which forces a real decision: keep paying, rent to a primary-resident tenant, or sell. For buyers and investors, that decision is the opportunity. The tax creates a finite, identifiable universe of motivated non-primary owners — many of them overseas and holding free and clear — who now have a reason to sell they didn't have last year. Reaching them before they list is an off-market edge.

Frequently asked questions