New York, NY – The New York City Department of Finance has begun mailing notices to owners of luxury residential properties that may be subject to the city’s new non-primary residence surcharge, requiring eligible homeowners to apply for exemptions by Aug. 21 if the property serves as their primary home.
The letters, dated July 22, advise recipients that city records indicate their property “may be subject to the new surcharge” and direct owners to submit documentation through the city’s online exemption portal before the deadline. The surcharge took effect on July 1 as part of New York City’s new tax on certain high-value second homes.
New surcharge targets high-value second homes
The annual surcharge, commonly referred to as the “pied-à-terre” tax, applies to residential properties that are not used as the owner’s primary residence.
During the first phase of the program, condominiums and cooperative apartments with market values between $1 million and $3 million are subject to a 4% annual surcharge. The rate increases to 5.25% for properties valued between $3 million and $5 million and 6.5% for those valued above $5 million.
For one-, two-, and three-family homes, the surcharge applies to properties valued above $5 million, with rates ranging from 0.8% to 1.3%. Property owners who qualify for an exemption, including those who use the residence as their primary home, must submit an application to avoid being assessed the surcharge.
Mamdani says notices were sent to potentially affected owners
Questions about the rollout were raised during a City Hall press conference after homeowners reported receiving notices despite already receiving tax benefits associated with primary residences.
One reporter questioned why some co-op owners who already receive New York City’s co-op and condo tax abatement—which generally requires the property to be a primary residence—were still sent surcharge notices.
Mayor Zohran Mamdani said the city intentionally notified homeowners whose properties may be subject to the tax so they would have an opportunity to apply for an exemption if necessary.
“As required by the law, the Department of Finance sent informational resources to homeowners to ensure that they understood the tax, that they understood the options before them, and also if they did not believe it to apply to them, that they had the time in order to be able to appeal,” Mamdani said.
Department of Finance Commissioner Preston Niblack said the city relied on existing records to identify potentially affected properties but acknowledged that some information may no longer be current.
“We did use all the available information that we had in order to determine the residency status,” Niblack said. “It could have been that we don’t have updated information on their filings, their exemptions.”
He added that the review period is intended to ensure only homeowners who are legally subject to the surcharge ultimately pay it.
“We want to ensure that through this new surcharge, we are only impacting those that should be impacted,” Niblack said.
Co-op owners raise questions about enforcement
The implementation has also prompted concerns from cooperative housing residents, where property taxes are typically paid collectively through the co-op corporation rather than by individual shareholders.
A reporter asked whether an unpaid surcharge by one shareholder could affect the entire cooperative building.
Niblack acknowledged the unique structure of co-op taxation and said the Department of Finance is working directly with individual co-op boards to explain how the new surcharge will be administered.
“We are reaching out to each of the individual co-op developments so they can better understand this process,” he said. “It is a little bit of new territory for us because of the way the surcharge is designed.”
What happens next
Homeowners who believe their property qualifies for an exemption must submit the required information through the city’s Non-Primary Residence Surcharge portal by Aug. 21 for residential homes and condominiums and Aug. 24 for cooperative apartments.
City officials said property owners who need assistance can contact the Department of Finance or call 311 for help completing the exemption process.
Related: New York City property tax, NYC Department of Finance, non-primary residence surcharge, pied-à-terre tax, luxury home tax
