Fewer than 9,000 owners expected to pay NYC's new pied-à-terre tax after a wave of exemptions

New York City's new tax on expensive second homes will start with far fewer payers than first projected. Fewer than 9,000 owners are expected to owe the so-called pied-à-terre surcharge after the city approved thousands of exemption requests, according to City Hall figures reported by the New York Daily News and La Voce di New York.

About 11,000 owners applied to the Department of Finance for an exemption. As of Wednesday, roughly 6,800 of those requests, about 62%, had been granted and about 3,800 were still being processed, the Daily News reported. The state had initially estimated about 13,000 homes would be subject to the tax, and the final count could fall further as the remaining applications are reviewed.

Who pays, and how much

The surcharge took effect under a state law on May 28. For the 2026-27 and 2027-28 tax years, it can apply to one-, two- and three-family homes the city values at more than $5 million and to condo and co-op units valued at $1 million or more, according to the Department of Finance. The agency notes that under state law, condos and co-ops are valued differently, so a $1 million unit is generally comparable to a $5 million house.

Rates rise with value. For houses, DOF lists 0.8% of market value for homes valued from $5 million to under $15 million, 1.05% from $15 million to under $25 million, and 1.3% above that. For condos and co-ops, the rates are 4% from $1 million to under $3 million, 5.25% from $3 million to under $5 million, and 6.5% at $5 million or more. The Daily News reported that individual bills range from about $40,000 at the low end to hundreds of thousands of dollars, or more, for the priciest homes.

The tax generally does not apply when a home is the primary residence of the owner, a tenant, an immediate family member, the beneficiary of a trust, or a majority owner of the company that holds it, DOF says.

Bills, appeals and revenue

The deadline to apply for an exemption for the 2026-27 tax year was Oct. 13. Bills are expected in November, and any surcharge will appear on the property tax bill due Jan. 1, 2027, according to DOF. Owners whose exemption is denied can appeal to the NYC Tax Commission, which also hears challenges to the city's valuation.

City officials told the Daily News they remain confident the tax will raise the roughly $500 million a year the state projected, regardless of how many exemptions are granted. La Voce noted that a comptroller's analysis before the law took effect had put likely revenue lower, between $340 million and $380 million, once rentals and owner behavior were factored in, but that a later review found theoretical revenue before exemptions could approach $1 billion. The administration also acknowledged over the summer that about 1,200 owners had been contacted by mistake, La Voce reported.

The lawsuits

The rollout is also being fought in court. A group of homeowners, including two relatives of Staten Island Council Member Frank Morano, sued in August, arguing the city wrongly made owners prove they live in the five boroughs full time, the Daily News reported. A state judge ruled last month that the city's notices were unlawful; the city appealed, which lets the rollout continue for now. Two other suits filed in Suffolk County last month challenge the legality of the tax itself.