The Pied-à-Terre Tax Is Here: What It Means for Co-op and Condo Boards in Park Slope and Brooklyn Heights

New York City’s new non-primary residence property surcharge took effect on July 1, 2026. The surcharge is commonly called the pied-à-terre tax because it targets certain high-value homes that are not used as an owner’s primary residence.

The rollout is creating practical questions for condo and co-op boards in Park Slope, Brooklyn Heights, and DUMBO. Owners are receiving notices. The Department of Finance has published a broad supplemental property roll. A lawsuit filed on August 7, 2026, challenges the city’s identification and notification process. The City Council will hold an oversight hearing on August 18.

The most important immediate date is September 18, 2026. Owners who received a Department of Finance notice and believe they qualify for an exemption must submit their application and supporting documentation by that date.

What is the pied-à-terre tax?

The pied-à-terre tax is an annual surcharge on certain New York City residential properties that are not used as primary residences.

For the first two property tax years: 2026–27 and 2027–28: the surcharge may apply to:

• One-, two-, and three-family homes valued by the Department of Finance at $5 million or greater.
• Condominium and cooperative units valued by the Department of Finance at $1 million or greater.
• Properties that are not used as the primary residence of an eligible owner, tenant, family member, or qualifying entity member.

The relevant value is the Department of Finance’s valuation. It may differ from:

• The property’s purchase price.
• A recent private appraisal.
• The unit’s current asking price.
• The assessed value used for other property tax calculations.

This distinction matters in markets such as Brooklyn Heights and DUMBO, where a unit’s market value can change significantly between tax assessment periods and private sales.

How much could the surcharge be?

The Phase One schedule published by the NYC Department of Finance generally provides the following rates:

These rates are not a substitute for a property-specific calculation. Boards and owners should review the Department of Finance notice, valuation, property classification, and exemption status before estimating the final amount.

For example, a 30-unit co-op may have several units valued above $1 million, but only some may be non-primary residences. The building should not assume that every unit in the same price range has the same liability.

Which Park Slope, Brooklyn Heights, and DUMBO properties are most likely to be affected?

The tax does not automatically apply to every expensive home or apartment. The key questions are the property type, the Department of Finance value, and how the property is occupied.

A condo or co-op unit in a Brooklyn Heights townhouse conversion, a DUMBO loft building, or a Park Slope elevator building may fall within the value threshold. However, the unit may still qualify for an exemption if it is used as a primary residence by an eligible occupant.

A qualifying primary residence can include a unit occupied by:

• The owner.
• A tenant or subtenant.
• An immediate family member of the owner.
• An immediate family member of a majority interest holder in an owning entity.
• One or more individuals who collectively hold a majority interest in an LLC, corporation, or partnership that owns the property.
• The sole beneficiary or beneficiaries of a qualifying trust.

A one-year arm’s-length lease may be particularly important for owners who do not live in the unit but rent it as a full-time residence. A short-term rental arrangement, occasional occupancy, or informal family use may not establish the same exemption.

Owners should not rely only on the fact that the property receives a co-op or condo tax abatement. The Department of Finance has stated that some owners may have received notices because the city’s records did not contain enough information to confirm primary-residence status.

Why did the city publish such a broad property roll?

In late July, the Department of Finance published a supplemental market value roll connected to the new surcharge. The roll includes one-, two-, and three-family homes, condominium properties, cooperative properties, and individual co-op units in buildings where at least one unit may be subject to the surcharge.

The Department of Finance has clarified that appearing on the roll does not mean that a property owes the tax. The city states that only approximately 17,000 property owners received direct notices indicating that they may be subject to the surcharge. The vast majority of properties appearing on the broader roll will not be subject to the tax.

This distinction is important for boards. A board should not send a building-wide message stating that every unit on the roll is taxable. It should instead explain:

1. The roll is broader than the final group of potentially affected owners.
2. A direct Department of Finance letter is the more significant trigger for an exemption response.
3. Each owner is responsible for reviewing their own notice and occupancy circumstances.
4. Board-level records may still help owners document unit status, leases, and contact information.

What does the August 7 lawsuit challenge?

On August 7, 2026, three New York City homeowners filed a lawsuit challenging the city’s implementation process. The case does not seek to invalidate the pied-à-terre tax itself. It challenges how the city identified potentially affected properties, published the roll, and placed the burden on owners to prove that their homes are primary residences.

According to reporting by CNN, the plaintiffs argue that:

• Their primary residences were incorrectly identified as potentially taxable.
• The city did not conduct sufficient due diligence before issuing notices.
• The broad public roll created confusion and unwanted scrutiny.
• The process shifted the burden of proof to homeowners.
• The city should remove or revise the publicly available list and pause related obligations.

The lawsuit remains pending. Unless a court or the Department of Finance changes the current procedure, owners who received notices should continue to treat September 18 as the operative exemption deadline.

A pending lawsuit may affect future procedures, but it should not be treated as an automatic extension.

What is happening at the August 18 City Council hearing?

The New York City Council has scheduled a joint oversight hearing for Tuesday, August 18, 2026, at 1:00 p.m. The hearing is titled “Oversight – Implementation of the Pied-à-Terre Tax.” It is being conducted by the Committees on Finance and Governmental Operations, State & Federal Legislation.

The Council meeting detail should be checked for updates concerning testimony, access, scheduling, or hearing materials.

The hearing may address:

• How the city selected properties for notices.
• Why the public roll includes such a large number of properties.
• The exemption application process.
• Privacy and data-publication concerns.
• Communication with co-op boards, condo boards, property managers, and owners.
• Whether additional guidance or administrative changes are needed.

Boards do not need to wait for the hearing before organizing their records. The hearing may clarify the process, but the September 18 deadline remains the practical date for current planning.

What should condo and co-op boards do now?

Boards should treat the rollout as a records, communication, and compliance issue: not as a building-wide tax assessment.

1. Confirm whether the building or individual units received notices

The board, managing agent, or managing office should ask whether any owners received a Department of Finance letter. The board should not request private tax returns or personal identification documents for its own files unless there is a clear legal and administrative reason.

2. Send a neutral owner notice

A useful owner communication should state:

• The tax began with the fiscal year starting July 1, 2026.
• Condo and co-op units valued at $1 million or more may be affected if they are not primary residences.
• Receiving a letter does not automatically mean the owner owes the surcharge.
• The exemption application deadline is September 18, 2026.
• Owners should consult the official Department of Finance instructions and professional advisers.

3. Preserve building records that may help owners

Depending on the building, useful records may include:

• Current proprietary leases.
• Unit ownership information.
• Board-approved sublease records.
• Copies of active leases where the owner has authorized the managing agent to retain them.
• Co-op or condo abatement records.
• Correspondence showing the unit’s approved occupancy status.

A 30-unit building may be able to review these records manually. A 300-unit building should use a centralized tracker showing notice status, owner contact, lease status, documentation received, and follow-up dates.

4. Review owner and tenant documentation carefully

The Department of Finance may request tax returns, DMV identification, voter identification, leases, utility bills, rent-payment records, renter’s insurance, family relationship documents, or entity ownership records.

Boards can help owners locate building records. They should avoid certifying facts they cannot independently verify.

5. Track the September 18 deadline

Owners should submit applications through the official residential and condo exemption portal or the co-op exemption portal.

If an owner believes the Department of Finance valuation is incorrect, the owner should review the separate Tax Commission surcharge appeal process. The choice between an exemption application and a valuation or surcharge challenge can affect the procedure available, so owners should obtain appropriate tax or legal advice.

How can Landlord Management help boards manage the rollout?

The immediate need is organized administration. Boards need accurate communications, controlled document handling, deadline tracking, and a clear distinction between building-level responsibilities and individual-owner obligations.

Landlord Management can help boards establish a response process that fits the building’s size and governance structure. For boards looking for a Property Management Company in Park Slope, Property Management Services in Brooklyn Heights, or a Property Management Company in DUMBO, the practical focus is the same: identify what the board can verify, direct owners to official resources, and maintain a documented timeline.

The next steps are straightforward:

• Confirm whether any owners received Department of Finance notices.
• Circulate the official exemption deadline and application links.
• Review available occupancy and sublease records.
• Create a confidential tracking process.
• Monitor the August 18 City Council hearing and court developments.
• Reassess the building’s communication after any official procedural changes.

The surcharge is now part of the 2026–27 property tax environment. For Park Slope, Brooklyn Heights, and DUMBO boards, early organization is the most reliable way to reduce confusion while owners determine whether the exemption applies to their individual units.