Key Takeaways
- New York City (NYC) extended the pied-à-terre tax exemption deadline to Sept. 18, 2026, for eligible homeowners, condo owners and co-op shareholders.
- Primary residence exemptions may apply when a qualifying owner, tenant, family member, entity owner or trust beneficiary occupies the property.
- Owners should file the exemption online, retain supporting records and address valuation disputes separately through the NYC Tax Commission.
The New York City Department of Finance has extended the exemption application deadline for New York City’s new non-primary residence surcharge, commonly referred to as the pied-à-terre tax, to September 18, 2026, for homeowners, condominium owners and cooperative apartment shareholders.
Many owners who received notices may ultimately qualify for an exemption, especially if the property is used as the primary residence of the owner, a tenant, an immediate family member or certain qualifying owners or beneficiaries of an entity or trust.
Receiving a notice does not automatically mean the surcharge is owed. Rather, it means the Department of Finance may not have sufficient information to confirm that the property is exempt. This is especially important for co-op shareholders because notices may have been received by the cooperative corporation, managing agent or building representative rather than directly by the shareholder.
Overview of the New Surcharge
The pied-à-terre tax is an annual surcharge imposed on certain New York City residential properties that are not used as a primary residence.
For the 2026–2027 and 2027–2028 property tax years, the surcharge may apply to condominium and cooperative units with a Department of Finance value of $1 million or more. This lower threshold for condos and co-ops reflects New York City’s current property tax valuation system and is generally intended to identify units comparable to higher-value residential homes.
For co-op and condo owners, the key issue is not simply whether the unit meets the value threshold. The more important question is whether the unit qualifies for an exemption because it is used as a primary residence by a qualifying person.
How Owners Must Respond
Owners who received a notice and believe the property is exempt must submit an exemption application by September 18, 2026.
The application is filed online through the Department of Finance system using the web link and security code or PIN included in the notice. A property may be exempt if it is the primary residence of the owner, a tenant or subtenant, certain majority owners of an entity, an immediate family member or the sole beneficiary of a trust.
For condominium owners and homeowners, the response process will generally be handled by the owner or an authorized representative. The owner should locate the Department of Finance notice, obtain the security code or PIN, gather supporting documents and submit the exemption application online.
For co-op owners, the process may require more coordination. Because the legal owner of the building is the cooperative corporation, notices and administrative communications may involve the co-op board or managing agent. Shareholders should contact the managing agent to confirm whether the building received a notice, whether the shareholder received a unit-specific notice and how the building is coordinating exemption filings.
Who May Qualify for an Exemption?
A co-op or condo unit may qualify for an exemption if it is used as a primary residence by a qualifying person. This may include the unit owner, a tenant or subtenant, an immediate family member of the owner, individuals who collectively hold a majority interest in an LLC, corporation or partnership that owns the unit or the sole beneficiary or beneficiaries of a trust-owned unit.
This means the surcharge is not limited to vacant apartments. A unit owned by an LLC, corporation, partnership or trust may still qualify for exemption if the primary residence requirements are satisfied and properly documented. However, entity-owned and trust-owned units should expect additional documentation requirements.
Documents Owners Should Prepare
Owners should gather documentation showing that the property is used as a primary residence by a qualifying person. Depending on the facts, this may include a federal or state income tax return, driver’s license or DMV-issued identification, voter registration, utility bills, lease agreements, rent payment records, renter’s insurance, entity documents, trust agreements or affidavits supporting family relationship or ownership status.
For rental units, owners should keep the current lease and documents showing the tenant’s actual occupancy. Entity-owned units should have ownership records showing whether qualifying individuals collectively hold the required majority interest. Trust-owned units may need the trust agreement or other documentation establishing the qualifying beneficiary.
Why Co-ops Require Special Attention
Co-op properties create additional administrative issues because the shareholder owns shares in the cooperative corporation rather than direct title to a real estate unit. As a result, notices, exemption filings and tax collection responsibilities may involve the cooperative corporation or managing agent.
Co-op boards and managing agents may need to identify affected units, communicate with shareholders, collect documentation and help coordinate filings. Shareholders should confirm who is responsible for filing the exemption application and whether the managing agent requires specific documents before the deadline.
Because the deadline applies to the exemption application, delays in communication between the shareholder, managing agent and board could create unnecessary risk. Co-op shareholders should act promptly even if they believe the unit is clearly their primary residence.
Condo Owners Should Also Act Promptly
Condo owners are more likely to receive the Department of Finance notice directly and to handle the exemption application themselves. However, they should not ignore the notice simply because the unit is their primary residence.
A condo owner should locate the notice, obtain the PIN or security code, gather supporting documentation and submit the exemption application online by the deadline.
Valuation Issues Are Separate
Some owners may disagree with the Department of Finance valuation used to determine whether the property meets the surcharge threshold. A valuation challenge is different from an exemption application. If the owner believes the property is overvalued, a separate challenge may be required through the New York City Tax Commission.
This issue is especially important for co-op units because the Department of Finance does not generally assess each apartment separately in the same way it assesses a condominium unit. Instead, the Department of Finance may estimate a co-op unit’s value based on the building’s overall value and the apartment’s allocated share percentage.
Owners should carefully determine whether their issue is exemption status, valuation or both. Filing the wrong type of challenge or assuming that one filing covers both issues, could create problems.
Practical Takeaways
Co-op and condo owners who received a notice should first determine whether the unit is actually a non-primary residence. If the unit is used as a primary residence by the owner, tenant, immediate family member, qualifying majority owner of an entity or qualifying trust beneficiary, an exemption may be available.
Owners should locate the notice PIN or security code, gather supporting documents and submit the exemption application online by September 18, 2026. Co-op owners should also contact their managing agent or board to confirm whether the building received a notice, whether their apartment was identified as potentially subject to the surcharge and whether the managing agent is coordinating exemption filings.
The key point is that receiving a notice does not necessarily mean the pied-à-terre tax is owed. However, the notice should not be ignored. Owners should respond through the Department of Finance online exemption process, keep copies of all submitted documents and watch for the Department of Finance determination letter or email.
Contact Us
Our professionals are available to assist you with tailored guidance. If you have any questions, please reach out to your PKF O’Connor Davies service team or:
Crystal Chan, EA
Tax Director
cchan@pkfod.com
Joseph Lee, CPA
Partner
jlee@pkfod.com