Since 1 July 2026 New York has charged an annual tax on a home that is not the owner's primary residence. For a condominium worth more than $1M by the city's valuation, that is 4–6.5% a year. The key feature: the exemption applies only to a primary residence, and a foreign buyer rarely qualifies for it — even when the New York apartment is their only property in the US. We set out who pays, how much, and what to do with the notice the city will send by 30 August.
Contents:
- What this tax is
- How much you pay: the rates
- The exemption: a foreign buyer rarely gets it
- When there is no tax: a long-term let
- The notice by 30 August: what to do
- What changes from 2028
- How to factor the tax into a purchase
- Popular questions
What this tax is
The tax on a non-primary home — informally the pied-à-terre tax (French for "foot on the ground", a second home for short stays) — was passed in late May 2026 as part of the state budget. It runs from 1 July 2026 through mid-2031. The logic is simple: if an apartment or house in New York is not the owner's primary home, an annual surcharge is added. The city expects the tax to raise at least $500M a year.
Two property types are covered: units in condominiums and co-ops, and one-to-three-family houses. The threshold and the rate differ between them.
How much you pay: the rates
For now the first phase applies — from 1 July 2026 through mid-2028. The rates are:
| Property type | Value | Rate per year |
|---|---|---|
| Condos and co-ops | $1–3M | 4% |
| Condos and co-ops | $3–5M | 5.25% |
| Condos and co-ops | over $5M | 6.5% |
| 1–3 family houses | $5–15M | 0.8% |
| 1–3 family houses | $15–25M | 1.05% |
| 1–3 family houses | over $25M | 1.3% |
For apartments the tax is charged not on the sale price but on the city's valuation (from the Department of Finance). For a condo that valuation is usually well below the actual purchase price, so the $1M threshold by valuation corresponds to a more expensive apartment on the market. It is worth checking your own valuation first — it is what decides whether the tax applies to you.
The exemption: a foreign buyer rarely gets it
The tax is not charged if the home is used as a primary residence by the owner, a family member, or a tenant on a lease of one year or more. A primary residence is where a person actually lives for most of the year.
This is where the main point for a foreign buyer lies. If a person's permanent home is abroad, the New York apartment is by definition a second home — even when it is their only property in the US and they come to it a few times a year. In that case the exemption does not apply and the tax is charged in full.
When there is no tax: a long-term let
There is a lawful way to take an apartment out of the tax — let it long term. If a tenant lives in the apartment as their primary residence on a lease of a year or more, the exemption covers it.
The practical takeaway: the tax falls on an apartment kept empty for occasional visits, not on an investment unit let to a permanent tenant. For a buyer taking a condo to rent out, the tax usually does not arise; for one keeping the apartment for their own rare visits, it does.
The notice by 30 August: what to do
By 30 August 2026 the city will send owners a notice: whether the apartment is subject to the tax and for how much. The letter states the projected amount and the appeal procedure.
If you believe the apartment is your primary residence, that a long-term tenant occupies it, or that the valuation is too high, the determination can be challenged. You will need documents that support the ground and a filing within the deadline stated in the notice.
What changes from 2028
A second phase begins in July 2028. Condo and co-op units move to a valuation based on sales of comparable units, and the rates and threshold become the same as for houses: 0.8–1.3% and from $5M. That means some apartments below $5M by market valuation may fall out of the tax. The exact effect will be clear from the new valuations.
How to factor the tax into a purchase
At the top of the Manhattan market this is a new standing cost on top of the usual common charges and property tax. On an apartment worth several million it adds tens of thousands of dollars a year, and it is built into the yield and holding-period calculation in advance. How to put together the full cost of owning a Manhattan apartment is covered in a separate article on ownership costs.
Popular questions
I am a foreigner and this is my only apartment in the US. Why do I pay the tax?
The exemption is for a primary residence — where you live for most of the year. If your permanent home is abroad, the New York apartment counts as a second home, even if it is your only one in the US.
From what price does the tax start for an apartment?
From $1M by the city's valuation, at 4–6.5%. A city valuation for a condo is usually below the sale price, so check the valuation itself, not the purchase price.
If I rent the apartment out, is there a tax?
No, if a tenant on a lease of a year or more lives in it as their primary residence. It is an apartment kept empty for occasional visits that is taxed, not one let to a permanent resident.
What do I do with the city's notice?
The assessment arrives by 30 August. If it is your primary residence, a long-term tenant lives there, or the valuation is too high, challenge it with documents within the stated deadline.
