Check If You Qualify for an Exemption
New York City’s pied-a-terre tax is calculated by multiplying the property’s Department of Finance market value by the surcharge rate assigned to its property type and value bracket.
The basic formula is:
DOF market value x surcharge rate = estimated annual surcharge
Do not use the listing price, purchase price, assessed value, or taxable value.
The new surcharge began July 1, 2026. Owners who received a notice and believe the property qualifies for an exemption now have until September 18, 2026 to apply, according to the NYC Department of Finance.
Start With DOF Market Value
Use the market value determined by the NYC Department of Finance. For the 2026-27 and 2027-28 property tax years, the city calls this the phase one market value. It appears on the surcharge notice and city assessment records. Co-op values are calculated at the unit level.
Find Your Rate
The New York State surcharge schedule sets different brackets for houses and apartment units.
Property type | DOF market value | Surcharge rate |
|---|---|---|
One, two, or three family house | $5 million through $15 million | 0.8% |
One, two, or three family house | Above $15 million through $25 million | 1.05% |
One, two, or three family house | Above $25 million | 1.3% |
Condominium or cooperative unit | $1 million through $3 million | 4.0% |
Condominium or cooperative unit | Above $3 million through $5 million | 5.25% |
Condominium or cooperative unit | Above $5 million | 6.5% |
These are not marginal brackets. The applicable rate is multiplied by the entire DOF market value, not only the amount above the threshold. The city’s final adopted rule defines the charge as the product of the statutory rate and market value.
Calculation Examples
Example 1: A house with a $12 million DOF market value
$12,000,000 x 0.8% = $96,000 estimated annual surcharge
Example 2: A condo with a $2.5 million DOF market value
$2,500,000 x 4.0% = $100,000 estimated annual surcharge
Example 3: A co-op with a $4 million DOF market value
$4,000,000 x 5.25% = $210,000 estimated annual surcharge
The bracket changes create steep increases. Owners near $3 million, $5 million, $15 million, or $25 million should confirm the exact DOF value printed on their notice.
Confirm That the Tax Applies
A calculation does not establish liability. The DOF value must reach the threshold, and the property must not have been used as a qualifying primary residence on the applicable taxable status date.
DOF identifies possible exemptions when the home is the primary residence of an owner, qualifying tenant or subtenant, immediate family member, majority interest holder in the owning entity, or qualifying trust beneficiary.
Receiving a notice does not mean the tax is owed. Appearing on the supplemental market value roll does not mean the tax is owed either. DOF states that most properties on that roll will not be subject to the surcharge.
Check the Notice Before Filing
The DOF notice includes an estimated surcharge. Compare it with your calculation, then verify the property type, value, ownership, and residency facts.
Value disputes run through the NYC Tax Commission surcharge appeal. An owner using that route to review exemption status must also challenge value and cannot simultaneously file a DOF exemption application.
If the property remains subject to the charge, the first surcharge will appear on the property tax bill due January 1, 2027.
The Bottom Line
Multiply DOF market value by the applicable rate. Then check for an exemption before treating the estimate as an amount owed.
Nile Lundgren can help owners understand property facts and market value context before they speak with legal or tax counsel. He is a real estate advisor, not a tax professional. This article is for informational purposes only and is not legal or tax advice.
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