NYC pied-a-terre tax: what rental owners owe by Sept. 18

New York City's surcharge on non-primary residences, widely called the pied-a-terre tax, is now in effect. The Department of Finance has mailed notices to roughly 17,000 property owners, exemption claims are due September 18, 2026, and the first charges appear on the property tax bill due January 1, 2027. For a condo or co-op valued at $1 million or more, the surcharge starts at 4.0 percent of market value per year.

Private-wealth coverage has treated the surcharge as an estate-planning footnote. Owners who rent can still change the outcome, because the levy is occupancy-triggered: does someone use the property as a primary residence? A tenant in the unit year-round can take it to zero. A rotation of 30-day furnished guests cannot. On a $2 million condo, that gap is $80,000 a year.

A challenge is already in court. A judge paused the rollout on August 10, an appellate judge restarted it on August 13, and the next hearing is August 31. As of August 18, 2026, the September 18 deadline has not moved. File as if it will hold.

Key facts

• Condos and co-ops valued at $1 million or more, and one- to three-family homes valued over $5 million, face the surcharge when the property is not someone's primary residence, according to the NYC Department of Finance.
• For tax years 2026-27 and 2027-28, condos and co-ops pay 4.0 percent of market value from $1 million to $3 million, 5.25 percent from $3 million to $5 million, and 6.5 percent above $5 million. Homes pay 0.8 percent from $5 million to $15 million, 1.05 percent from $15 million to $25 million, and 1.3 percent above $25 million, per the DOF rate table.
• Exemption filings are due September 18, 2026, a date the city moved from August 21 in early August after widespread confusion about the notices.
• The DOF rule implementing the surcharge took effect July 14, 2026. Primary-residence determinations look to the property's status as of January 5, 2026.
• Charges first appear on the January 1, 2027 property tax bill. Authorization runs through June 30, 2031 unless the surcharge is renewed.

What the surcharge is, and who received a notice

The surcharge originates in the New York State budget bill. The city's Department of Finance administers it under a rule that became final on July 14, 2026, and applies it to high-value residential property that is nobody's primary residence: condos and co-ops valued at $1 million or more, and one- to three-family homes valued over $5 million, per the DOF.

Those percentages attach to the property's full market value, not the slice above the threshold. Greenberg Traurig works the arithmetic: a $5 million home at 0.8 percent owes $40,000 a year. Condos sit on a heavier schedule. At $2 million, 4.0 percent produces an $80,000 annual surcharge ($2,000,000 x 0.04). At $4 million, the 5.25 percent middle band produces $210,000 ($4,000,000 x 0.0525).

DOF mailed the first wave of notices, about 17,000 of them, on July 22, 2026. Notices for this fiscal year must go out by August 30, 2026, so an empty mailbox is not a clearance until that date passes. Occupancy changes made now will not rewrite this year's determination. The rule keys the property's status to January 5, 2026.

Who qualifies for the exemption before September 18

The property is exempt if it is the primary residence of the owner, a tenant or subtenant, an immediate family member of the owner, the sole beneficiary of a trust that owns it, or individuals who collectively hold a majority interest in the entity that owns it, per the DOF exemption criteria.

DOF asks for federal or state tax returns or driver's licenses showing the occupant's address, a lease plus utility bills for tenant-occupied units, birth or marriage certificates for family members, and partnership or trust agreements with affidavits for entity-owned property. Houses and condos use one application; co-op units use another. Greenberg Traurig notes that DOF treats a unit as a primary residence when records identify it as the occupant's permanent home on a tax return, and that occupancy for a majority of days in the preceding calendar year supports that status.

The original deadline was August 21, 2026 (August 24 for co-ops). Mayor Zohran Mamdani and Finance Commissioner Richard Lee moved it to September 18 after thousands of owners with one home assumed the notices applied to them.

None of the litigation has moved that date. Homeowners represented by attorney Randy Mastro sued, and a Staten Island judge issued a temporary restraining order on August 10 that briefly froze the rollout. An appellate judge allowed the rollout to continue on August 13. The next hearing is August 31, 2026. Treat September 18 as firm.

Does renting the unit out get you exempt?

Exemption follows who lives there, not the mere existence of a rental.

A genuine long-term tenant takes the unit off the surcharge. The exemption list names property that is the primary residence of a tenant or subtenant, documented with a lease and utility bills. An owner of a $2 million condo with a full-year tenant owes nothing and still collects rent. Leave the same unit empty as an occasional crash pad and the bill is $80,000.

Short stays were already closed as a path around the tax. Under the city's registration law, you cannot rent an entire apartment or home to visitors for fewer than 30 days, even in a building you own. Legal short stays require the registered host to be present, allow at most two paying guests, and give every guest free access to every room and exit. A unit that is not the owner's home cannot meet those conditions, so a non-primary NYC condo was never a lawful Airbnb operation. We covered how this kind of local framework has spread in our post on state preemption and local short-term rental rules.

Furnished stays of 30 days or longer sit outside the registration requirement and are legal. They do not create a primary resident. Monthly guests who keep a permanent home elsewhere never convert the unit for surcharge purposes. DOF looks for that permanent home on tax returns and for a majority of days in the prior year; thirty-day guests satisfy neither, so a mid-term unit stays fully exposed. We laid out that occupancy-versus-yield trade-off in our analysis of the mid-term rental boom. In New York the surcharge now weights the annual lease.

Do the math before you decide

On the $2 million condo, $80,000 a year is $6,667 a month ($80,000 / 12). Furnished 30-day stays at $9,000 a month and 80 percent occupancy gross $86,400 ($9,000 x 12 x 0.80). After the surcharge, that mid-term program nets $6,400 before cleaning, furnishing, utilities, and vacancy risk. An annual lease at $7,500 a month grosses $90,000 with no surcharge, because the tenant's occupancy exempts the unit. Once the tax is in the model, the year-long lease outperforms the furnished rotation by roughly $80,000 the owner does not owe.

A $4 million condo owes $210,000 a year, a figure few rental programs of any duration can absorb. Owners in that band are left with a genuine primary resident (themselves, a family member, or a full-time tenant), a sale, or writing the check. Rates are locked for 2026-27 and 2027-28, and the tax runs through June 30, 2031 unless renewed, which makes this a five-year planning problem. Record-keeping that supports filings of this kind is covered in our piece on tax moves short-term rental owners overlook.

What to do before September 18

When someone already uses the unit as a permanent home, file. Assemble the lease, utility bills, and the occupant's tax return or driver's license; choose the house-and-condo form or the co-op form; submit before September 18, 2026. A denial goes through the Tax Commission's surcharge appeal process.

If the notice is wrong, file anyway and say so. The city extended the deadline because thousands of primary residents received those notices.

If nobody lives there, use the numbers above and choose among a full-year tenant, a sale, or paying the surcharge. Do not wait on the lawsuit. A missed filing deadline is a self-inflicted wound the litigation will not repair.

Owners who keep a furnished mid-term rotation and price the surcharge into the rent should still take those bookings on their own domain. Haven is a branded booking site for that channel: no booking commission, and the guest relationship stays with the owner for the next stay.

What to watch next

August 31 is the hearing that can still change collection. A ruling against the city could suspend the surcharge before the January 1, 2027 bills go out; a ruling for the city locks the tax in through 2031. Watch DOF's surcharge page for updated guidance, and watch the mail through August 30, the last day this year's notices can be issued.

Other high-cost cities will study the mechanism if it holds. A surcharge keyed to primary residence raises revenue and pressures vacant units toward tenants. How the case comes out will decide how exportable that design looks.

FAQ

Do I have to pay the NYC pied-a-terre tax if I rent out my apartment?

Not if the tenant uses it as a primary residence. DOF exempts units that are the primary residence of a tenant or subtenant when the claim is documented with a lease and utility bills. File by September 18, 2026. Short-term visitors and 30-day furnished guests do not qualify; the unit is not their permanent home.

What is the deadline to file the NYC non-primary residence surcharge exemption?

September 18, 2026, for every property type. The city moved that date from August 21 after confusion over the first notices. Denied claims can be appealed through the NYC Tax Commission.

How much is the surcharge on a $2 million condo?

$80,000 a year for 2026-27. Condos valued from $1 million to $3 million pay 4.0 percent of market value, and $2,000,000 x 0.04 = $80,000. The rate applies to the full value, not the amount above $1 million.

Can I run an Airbnb in a NYC apartment that is not my primary residence?

No. City rules bar renting an entire apartment for fewer than 30 days. A registered host must be present during short stays and may take at most two paying guests, which a unit you do not live in cannot satisfy.

Do 30-day furnished rentals avoid the pied-a-terre surcharge?

No. Stays of 30 days or more are legal without registration, but a rotation of monthly guests never establishes primary residence, so the surcharge still applies. A genuine full-time occupant, such as an annual tenant, is what exempts the unit.