On July 22, 2026, the New York City Department of Finance mailed notices to every owner whose records did not establish the property as a primary residence, and the response deadline is now September 18, 2026. Miss it and the new annual surcharge shows up on the property tax bill due January 1, 2027. A condo carried at $1,000,000 of city valuation owes roughly $40,000 a year, so this is not paperwork worth deferring.
The surcharge itself was enacted on May 27, 2026 in the state budget and lives in the Tax Law as Article 30-C, sections 1350 through 1356. It applies to city fiscal years starting July 1, 2026 and sunsets June 30, 2031 unless Albany renews it. I run this math for buyers weighing a second home in the city, and the number that surprises people is never the rate. It is the valuation the rate is measured against.
The threshold is the city's valuation, not the sale price
In Phase 1, running July 1, 2026 through June 30, 2028, coverage is measured against the Department of Finance valuation printed on your property tax bill. One-to-three-family houses are covered above a $5,000,000 valuation. Condo and co-op units are covered above a $1,000,000 valuation. The gap is not a drafting error: the city values apartments on a rental-income method that runs well below sale prices, and the Department of Finance says a condo or co-op it values at $1,000,000 is generally comparable to a single-family home valued at $5,000,000 or more. Read the valuation off the bill before deciding whether your unit is in scope.
The rates, applied to the full value
Nothing here is marginal. Once a property crosses a tier, the rate hits the entire valuation.
| Property type | Department of Finance valuation | Annual rate |
|---|---|---|
| House (1-3 family) | $5M to $15M | 0.8% |
| House (1-3 family) | $15M to $25M | 1.05% |
| House (1-3 family) | Above $25M | 1.3% |
| Condo or co-op | $1M to $3M | 4.0% |
| Condo or co-op | $3M to $5M | 5.25% |
| Condo or co-op | Above $5M | 6.5% |
Phase 1 schedule, July 1, 2026 through June 30, 2028.
Two worked examples. A condo at exactly $1,000,000 of city valuation pays 4% of the full amount, about $40,000 a year. A non-primary house valued at $20,000,000 pays 1.05% of the full $20,000,000, or $210,000 a year. From July 1, 2028, Phase 2 is written to move condos and co-ops onto the same $5,000,000 threshold and the same house schedule under a new assessed-value system the Department of Finance has not finalized, so treat those numbers as scheduled rather than settled.
Who is exempt
A property is out of the surcharge when it is the primary residence of any one of these:
- The owner.
- A tenant or subtenant.
- An immediate family member: spouse, child, sibling, parent, grandparent, or grandchild.
- The individuals who collectively hold a majority interest in an owning LLC, corporation, or partnership, which applies only when the entity holds the full fee interest, or all the shares for a co-op unit.
- The sole beneficiary of a trust.
NYC Condos $1M and Up
Manhattan and Brooklyn condos in the price range the surcharge reaches
45 E 30TH Street #12A
NoMad
445 5th Avenue #PH-D
Park Slope
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.
How to respond before September 18
The original deadlines were August 21 for houses and condos and August 24 for co-ops. On August 1 the city consolidated both into one date, September 18, 2026, for every owner who received a notice. The filing is electronic at nyc.gov/npsurcharge, using the PIN printed on your notice.
Proof the city accepts
A state or federal income tax return showing the address as your permanent home, other primary-residence tax credits or exemptions on the property, and supporting documents such as a driver's license, voter registration, utility bills, or a bona fide long-term lease when a tenant is the one living there.
There is a lawsuit. File anyway.
O'Brien v. City of New York was filed on August 7, 2026 in Richmond County Supreme Court by three homeowners. It challenges the rollout, not the tax: the claim is that the Department of Finance pushed the burden of proof onto roughly 960,000 owners through a July 24 supplemental roll that published owner names and addresses, which is where the privacy objection comes from. Even a win would force the city to redo its notices rather than strike the surcharge. The Real Estate Board of New York did not sue; it objected to the valuation methodology in testimony at a July rulemaking hearing. Nothing about the case pauses your September 18 deadline, so file and let the litigation play out.
What this changes for buyers and sellers
The city projects roughly $500 million a year from roughly 10,000 properties. For a buyer who will not occupy the home, the surcharge is a fixed annual carrying cost that belongs in the budget next to common charges and property tax, and it stacks on top of the one-time mansion tax due at closing. For a seller of a covered unit, every future non-resident buyer has to underwrite the same annual number before bidding, which is a pricing input rather than a talking point. Run your purchase price through the NYC mansion tax calculator for the closing-day figure, read the mansion tax guide for the bracket math, and see the pied-a-terre buying guide for how the surcharge fits into a second-home purchase from the start. The buying and selling above $1M FAQ covers the rest of the cost stack.
Got a notice and not sure it is right?
Send me the address and I will walk you through the valuation on the bill, which exemption path fits, and what the surcharge does to a purchase or a sale price.
Ask MiltonThis is planning context, not legal or tax advice. Confirm your own filing with a New York real estate attorney or your CPA before the September 18, 2026 deadline.
