You live in New Jersey. You work in Manhattan. To make the commute easier, you keep an apartment in the City year-round. You also spend enough time in New York that the City treats you as a resident for income-tax purposes.
Then you get a notice saying that same apartment may be considered a non-primary residence and subject to New York City’s new pied-à-terre tax.
Strange as that sounds, both can be true.
How Both Can Be True
New York City uses one set of rules to decide whether you are a resident for income-tax purposes. If your permanent home is outside NYC, but you keep a year-round place to live in the City and spend 184 days or more there, New York can generally treat you as a NYC resident for income tax.
The pied-à-terre tax asks a different question: Is this particular apartment your primary residence?
So when a client says, “But New York already treats me as a resident,” I would not stop there. I would want to know how the apartment is actually being used.
The $1 Million Threshold Condo Owners Should Know
The name “pied-à-terre tax” may make you picture a very expensive Manhattan second home. But for the first two property tax years under the new law, the threshold for condos and co-ops is lower than many people may expect.
For the 2026-27 and 2027-28 property tax years, a condo or co-op with a Department of Finance market value of $1 million or more may be subject to the surcharge if it is not used as a primary residence. One-, two-, and three-family homes generally have a threshold above $5 million.
So if you heard “$5 million” and assumed your condo was outside the rule, check the property type before moving on.
A Notice Does Not Automatically Mean You Owe the Tax
The Department of Finance says the surcharge generally will not apply if the property is used as a primary residence by the owner, a tenant or immediate family member, or certain individuals connected to an entity that owns the property.
I would start with the apartment itself: Who owns it? Who actually lives there? Is there a lease? What address appears on tax returns and other records?
If you are claiming the apartment is someone’s primary residence, your records should back that up.
If you received a Department of Finance notice, do not ignore it, but do not assume you owe the surcharge either. Owners who believe the property qualifies for an exemption can submit supporting documentation. The current 2026 exemption application deadline is October 6, 2026.
Before you answer the notice, make sure you can show who actually uses the apartment and why it qualifies for an exemption.
What I Would Do Next
If your primary home is outside New York City but you own a condo or co-op in the City, especially if New York already treats you as a resident for income-tax purposes, I would have your CPA review the property separately.
Start with the notice, ownership documents and a clear explanation of who uses the apartment and how. That gives your CPA what they need to determine whether the property qualifies for an exemption and what, if anything, needs to be filed.