Mayor Zohran Mamdani and the Department of Finance began notifying property owners on 23 July that they may be covered by New York City's new non primary residence property surcharge, commonly called the pied a terre tax. The letters begin the implementation stage of a tax agreed with Governor Kathy Hochul and authorised through the state budget process.
The final city guidance is broader than the original public shorthand about second homes worth more than $5 million. For the 2026 to 2027 and 2027 to 2028 property tax years, one to three family homes valued by the Department of Finance at more than $5 million may be covered. Condominium and cooperative units valued at $1 million or more may also be covered.
The surcharge generally does not apply when the property is a primary residence for the owner, a tenant, an immediate family member, a qualifying majority owner of a business entity or a trust beneficiary. Owners who received a letter and believe an exemption applies must submit evidence by the deadline in the notice.
What the tax charges
For one to three family homes, the published surcharge rates run from 0.8 percent to 1.3 percent of Department of Finance market value. For condominium and cooperative units, the published rates run from 4 percent to 6.5 percent. The rate rises with the value band.
The city says covered charges will appear on the property tax bill due 1 January 2027. Owners can also challenge a property valuation through the New York City Tax Commission, but the city guidance warns that the appeal route affects how an exemption claim is handled.
Who can claim an exemption
The main exemption is actual primary residence use. The city lists owners, tenants, immediate family members, qualifying majority owners of an entity and trust beneficiaries as possible primary residents. The required evidence depends on who occupies the property.
The Department of Finance asks for a recent tax return or other primary residence documents. Tenant cases also require a lease or affidavit and supporting rental records. Business entity and trust cases require ownership documents as well as residence evidence.
What Mamdani delivered
The administration moved the measure from a long discussed tax proposal into letters, a property roll, application forms and a billing timetable. That is a concrete governing result and a visible part of the agreement reached with Albany.
City Hall has projected about $500 million in annual revenue. That figure should remain a projection until exemptions, valuation challenges, collection rates and actual bills are recorded. The first revenue report should show how many properties paid, how many were exempt and how much money reached the city.
What owners should do
Anyone who received a letter should use the Department of Finance eligibility guide and follow the deadline printed in the notice. Residential home and condo applications are due 21 August 2026. Cooperative unit applications are due 24 August 2026.
Owners who dispute the valuation or an exemption decision should use the official Tax Commission route. The public guidance and 311 remain the correct sources for individual cases.
Public record
- The Department of Finance began mailing possible surcharge notices on 23 July 2026.
- A supplemental market value roll was published on 24 July 2026.
- The surcharge covers the 2026 to 2027 and 2027 to 2028 property tax years under the current guidance.
- A notice identifies possible coverage and does not by itself establish that tax is owed.
- Covered charges are scheduled to appear on property tax bills due 1 January 2027.
What to check next
Publish the number of applications received, approved and denied after both August deadlines.
Keep the supplemental roll and valuation method available in a form owners and the public can inspect.
Report how many properties were billed and the total surcharge assessed for the first payment date.
Compare actual collections with the projected $500 million annual figure and explain any gap.