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Real Estate
New York City has reduced the number of property owners receiving new pied-à-terre tax notices from roughly 17,000 to 10,800 after reviewing residency information and approving thousands of appeals, while extending the deadline to seek an exemption or prove primary residency to October 6, 2026.
The revised figure marks a significant change in the rollout of the city’s new annual surcharge on qualifying non-primary residences, but it does not eliminate the obligation for affected owners to respond.
Mayor Zohran Mamdani continues to maintain that the tax will generate approximately $500 million annually for the city, despite questions about how many properties will ultimately remain taxable after residency claims, valuation challenges and other exemptions are processed.
Why the target list changed
The city initially mailed notices to approximately 17,000 owners whose properties appeared potentially subject to the surcharge.
The Department of Finance later gained access to 2025 state income-tax data and used that information to identify owners whose New York City properties were already documented as primary residences. The agency also reviewed appeals submitted after the first wave of notices.
According to reporting by ABC7 New York, the city established primary residency for 1,210 property owners and approved 2,892 appeals, while another 2,652 appeals remained under review.
The revised process has produced a new notice group of approximately 10,800 property owners based on the updated residency data.
Receiving a notice does not automatically mean an owner will owe the surcharge. It means the Department of Finance has identified the property for review and has not confirmed that it qualifies for an exemption using the information currently available.
The city’s official non-primary residence surcharge guidance states that a property appearing on a supplemental assessment roll also does not necessarily mean the property will be taxed; direct notice is the key signal for owners who must take action.
October 6 is the operative deadline
The Department of Finance has extended the deadline for exemption applications to October 6, 2026, for affected residential homes, condominiums and cooperative units.
The deadline supersedes earlier dates that had generated confusion during the rollout.
Owners who received a notice and believe the property is exempt should submit their application through the appropriate city portal:
- Residential homes and condominiums exemption application
- Cooperative units exemption application
- NYC Department of Finance eligibility guide
The application should be filed as soon as possible rather than near the deadline, particularly when an owner must obtain records from a tenant, family member, trust, partnership or limited liability company.
Owners should also preserve confirmation of submission, copies of every document uploaded and any correspondence received from the city.
If the city rejects the application, the owner may receive a determination letter explaining the next available challenge process. The surcharge is scheduled to appear on the property-tax bill due January 1, 2027, if the property remains subject to the charge.
Which properties may be subject to the surcharge?
For the 2026–27 and 2027–28 property-tax years, the surcharge generally applies to:
- One-, two- and three-family homes with a Department of Finance value of at least $5 million.
- Condominium and cooperative units with a Department of Finance value of at least $1 million.
- Properties that are not used as a primary residence by a qualifying owner, family member, entity interest holder or tenant.
The applicable rates are based on the city’s valuation rules.
| Property type | DOF value | Annual surcharge |
|---|---|---|
| One-, two- and three-family homes | $5 million to under $15 million | 0.8% |
| One-, two- and three-family homes | $15 million to under $25 million | 1.05% |
| One-, two- and three-family homes | $25 million or more | 1.3% |
| Condominiums and co-ops | $1 million to under $3 million | 4% |
| Condominiums and co-ops | $3 million to under $5 million | 5.25% |
| Condominiums and co-ops | $5 million or more | 6.5% |
The city’s rules state that once a property crosses the applicable value threshold, the surcharge is calculated against the relevant property value rather than only the amount above the threshold.
That makes the Department of Finance’s valuation figure critical. Owners should review the market-value information in their notice and compare it with the property’s assessment records instead of relying solely on the purchase price, broker opinion or current market estimates.
The NYC Comptroller’s fiscal analysis previously estimated that the tax could affect slightly more than 11,200 properties after valuation and residency adjustments, with the potential to approach the city’s $500 million revenue target before accounting for behavioral changes such as renting, selling or occupying units.
What documents owners may need
The documents required depend on who uses the property as a primary residence.
Owner occupancy
An owner seeking an exemption may generally provide:
- The most recently filed federal or state personal income-tax return showing the property as the permanent home address.
- A valid New York State driver’s license, learner’s permit or non-driver identification card showing the property address.
- In some circumstances, a voter-identification card combined with additional proof of occupancy.
The city may accept other evidence in unusual cases, but owners should follow the document categories listed in the Department of Finance guidance.
Immediate family occupancy
A property may qualify if it serves as the primary residence of an eligible immediate family member.
Supporting records may include a birth certificate, marriage certificate or the city’s Immediate Family Member Affidavit.
The relationship must be documented in addition to proving that the family member actually uses the property as a primary residence.
Tenant occupancy
A tenant or subtenant may establish an exemption if the property is their primary residence and the tenancy meets the city’s requirements.
Owners should be prepared to submit:
- A current lease or sublease.
- Proof of the tenant’s primary residence.
- At least one additional rental document, such as a utility bill, rent-payment record or renter’s insurance policy.
The city also provides a Tenant or Subtenant Affidavit for qualifying situations.
An empty unit, a short-term rental or a property merely listed for rent generally will not establish the same exemption as an occupied home under a qualifying lease.
LLCs, corporations, partnerships and trusts
Entity ownership does not automatically protect a property from the surcharge.
Owners using a business entity may need to provide the relevant operating agreement, partnership agreement, trust agreement or corporate records, along with a Majority Interest Affidavit.
Trust arrangements may require additional documentation showing that the resident is a qualifying beneficiary.
Because the rules governing entity ownership can be complex, affected owners should consider consulting a tax professional or real estate attorney before submitting a certification.
How the appeal process works
Owners who believe the city incorrectly classified their property as a non-primary residence should begin by reviewing the notice and filing the exemption application through the correct Department of Finance portal.
The notice should identify the property, projected surcharge information and the instructions for responding.
The city’s rules generally provide an administrative appeal process for primary-residency determinations. The appeal must include a certification and supporting evidence showing that the property is the primary residence of:
- A covered owner.
- An eligible immediate family member.
- A qualifying tenant or subtenant.
- A qualifying majority-interest holder in an entity.
- An eligible trust beneficiary.
Owners challenging the property’s value may also petition the New York City Tax Commission. A valuation challenge is separate from proving primary residency, although the two issues may overlap.
The Department of Finance warns that owners should not pursue duplicate challenges through conflicting channels. If an owner asks the Tax Commission to consider both valuation and primary residency, the Department of Finance may not separately review the same primary-residency issue.
Owners should therefore identify the nature of the dispute before filing:
- Residency dispute: The property is a primary residence or is occupied by a qualifying family member or tenant.
- Valuation dispute: The Department of Finance’s value is incorrect or places the property in the wrong surcharge bracket.
- Ownership-structure dispute: The property is held through an LLC, partnership, corporation or trust and the resident’s legal interest must be documented.
- Mixed dispute: Both the property value and residency classification are contested.
What owners should do now
The October 6 deadline gives affected owners additional time, but it does not remove the need for a complete submission.
Owners who received a notice should:
- Read the notice carefully and confirm the property address and deadline.
- Check the Department of Finance value used for the surcharge.
- Determine whether the property is occupied by a qualifying owner, family member or tenant.
- Gather tax returns, identification, leases, affidavits and ownership documents.
- File through the correct city application portal before October 6.
- Save the confirmation number and copies of all submitted materials.
- Review any determination letter and follow the stated appeal instructions.
- Seek professional advice if the dispute involves an entity, trust, valuation issue or potential tax liability.
The rollout remains a major development in New York real estate news and a notable indicator of broader NYC real estate trends as city officials pursue new revenue from luxury residential holdings.
For continuing coverage, readers can follow the New York News Daily tag for Zohran Mamdani. The city’s official Department of Finance surcharge page remains the controlling source for application instructions, documentation requirements and deadline updates.
This article is for general information and is not legal, tax or accounting advice; property owners should consult qualified advisers about their individual circumstances.