Mansion Tax Plus Pied-a-Terre Tax: A $3M Second Home

Facts checked October 9, 2026. Roll data: Department of Finance supplemental roll of July 24, 2026.

A $3,000,000 second home in New York City costs $45,000 in mansion tax at closing, plus a pied-a-terre surcharge that runs from $40,000 a year at a Department of Finance valuation of $1,000,000 to $157,500 a year at $3,000,000, so the first-year cost ranges from $85,000 to $202,500. The two taxes work off different numbers, which is where buyers get caught: the mansion tax follows the price you pay, and the surcharge follows the city's valuation of the apartment.

Across my 25+ years selling NYC real estate, this is a cost line second-home buyers now have to price, and it belongs in the offer, not after it. The mansion tax is owed on a primary residence too, while the surcharge is not, so the order of questions matters. Start with the price, then read the valuation off the tax bill.

Step one: the mansion tax, on the price

The mansion tax is paid by the buyer, once, at closing, on residential purchases of $1,000,000 or more anywhere in the city. It applies to the entire price, so it is a cliff, not a marginal rate. A $3,000,000 purchase falls in the $3,000,000 to $4,999,999 bracket at 1.50%, which is $45,000. A price of $2,999,999 would owe 1.25%, about $37,500. The tax is reported on Form TP-584. Run your own price through the mansion tax calculator and read the complete mansion tax guide for the full schedule.

Step two: the surcharge, on the city's valuation

The surcharge is annual and applies to condos and co-ops the city values at $1,000,000 or more that are not anyone's primary residence. Phase 1 rates apply to the full valuation: 4% from $1,000,000, 5.25% from $3,000,000, 6.5% from $5,000,000. Because the valuation usually runs below the sale price, a $3,000,000 purchase does not automatically land in the 5.25% band. On the July 24 roll, 16,574 of the 17,750 over-the-line units, or 93%, are valued under $3,000,000 and so sit in the 4% band.

The full first-year cost, by valuation

I cannot tell you which row your apartment lands in without its valuation, so here is the grid for a $3,000,000 purchase price. It assumes a full year of surcharge and no exemption.

After year one, only the surcharge repeats. At a $2,000,000 valuation that is $80,000 every year the rule applies, which is why I treat it as a permanent line next to common charges and property tax. The mansion tax does not come back; the surcharge does. Phase 1 runs through June 30, 2028, and the whole tax sunsets June 30, 2031 unless renewed.

NYC Condos $1M and Up

Manhattan and Brooklyn condos in the price range the surcharge reaches

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Active

$1,695,000

15 William Street #22H

Financial District

2 bd 2 ba 1,373 sf

View Details Tour

Condo · 2007 RLS #RLS20116588

Active

$1,095,000

40 Huntington Street #2C

Red Hook

2 bd 2 ba 1,064 sf

View Details Tour

Condo · 2020 RLS #RLS20107047

Listing information provided courtesy of the Real Estate Board of New York's Residential Listing Service (RLS). Information is deemed reliable but not guaranteed. Sale listings verified. ©2026 REBNY. RLS data displayed by Keller Williams NYC.

Three things that change the math

• Primary residence. If you or an immediate family member will live there, or a qualifying tenant does, the surcharge is exempt. The mansion tax is still owed.
• Timing. The first charges appear on the bill due January 1, 2027. How a mid-year purchase is prorated is a matter for the contract. Attorneys have told Inman they are writing provisions that split the surcharge by days of ownership between buyer and seller, so ask your attorney before you sign.
• The valuation can differ from what you expect. The city values condos and co-ops on a rental-income method. Two apartments with the same asking price can carry valuations on opposite sides of a band edge. See the $1,000,000 cliff for how that plays out near the first line.

If the apartment will be a part-time home, the surcharge is what you are really buying into. A tenant can change that on a qualifying lease; the sell or lease comparison and my pied-a-terre buying guide cover the options. The pied-a-terre tax hub lists every building on the roll.

This is general information, not legal or tax advice. Confirm your own filing with a New York real estate attorney or your CPA.

Sources

Facts on this page were checked against these sources on October 9, 2026.

• NY Tax Law Section 1402-a, the mansion tax schedule, and Form TP-584
• NY Tax Law Article 30-C, sections 1350 to 1356, the surcharge rates and exemptions
• NYC Department of Finance, non-primary residence surcharge, thresholds and the January 1, 2027 first bill
• NYC Department of Finance, Supplemental Market Value Roll, tax year 2027, published July 24, 2026, analyzed by miltoncoste.com, band counts
• Inman, September 29, 2026, attorney commentary on proration provisions