The $1 Million Pied-a-Terre Tax Cliff: $999,000 vs $1,000,000

Facts checked October 9, 2026. Roll data: Department of Finance supplemental roll of July 24, 2026.

A condo or co-op apartment that the Department of Finance values at $999,000 owes no pied-a-terre surcharge, while one valued at $1,000,000 owes about $40,000 a year, and 3,899 units on the July 24 roll sit within $50,000 of that line. Of those, 2,076 fall just below it and 1,823 just above, so a few thousand owners are separated from the surcharge by a valuation difference of less than 5%.

I run the surcharge math on every second-home purchase I price, and the first number I read is the valuation on the property tax bill, not the price on the listing. The surcharge keys off the city's valuation, which the Department of Finance builds on a rental-income method that generally runs below what an apartment sells for. A $1,500,000 sale can sit on either side of the line. The tax is also a cliff, not a ramp: the rate applies to the full valuation, not to the amount above $1,000,000.

What the cliff costs

The Department of Finance writes each tier as "$X or greater, but less than $Y," so a valuation of exactly $1,000,000 takes the higher band. The Phase 1 rates for condos and co-ops are 4% from $1,000,000 up to $3,000,000, 5.25% from $3,000,000 up to $5,000,000, and 6.5% from $5,000,000. Here is the annual surcharge on either side of each line:

The $1,000,000 step is the most expensive one in relative terms, because it goes from nothing to $40,000. The $5,000,000 step is the largest in dollars. All of this assumes the unit is not someone's primary residence. If it is, or if an exemption applies, none of it is owed. See what to file by October 13.

Where the units pile up

Of the 3,899 units within $50,000 of the line, 2,595 are condos and 1,304 are co-op apartments. Manhattan has 3,607, Brooklyn 291 and Queens 1. Not one unit on the roll is valued at exactly $1,000,000. The other lines have far fewer neighbors: 104 units sit within $50,000 of $3,000,000, with 59 of them below it, and only 7 sit within $50,000 of $5,000,000, with 6 below.

What an owner near the line can and cannot do

The valuation is the city's, not something a contract sets. The channel for disputing a value is a value challenge to the NYC Tax Commission. If you ask the Commission to decide residency in the same filing, the Department of Finance defers to it and ignores the submission you made to DOF for that property, which I flagged in the filing guide. The sure routes to zero are an exemption (the owner, a family member or a qualifying tenant lives there) or selling.

• The $1,000,000 line is a Phase 1 rule. Phase 2, starting July 1, 2028, moves condos and co-ops to $5,000,000 under a new assessed-value system the city has not finalized, so I treat it as scheduled, not settled. See what Phase 2 changes.
• If you are buying, read the valuation off the tax bill before you make an offer. A unit valued at $995,000 and one valued at $1,005,000 can carry the same asking price and a $40,000 annual difference.
• The mansion tax has its own cliff, on the sale price, and it stacks on top. I put the two together in the full first-year cost of a $3,000,000 second home.

The pied-a-terre tax hub lets you look up any building and see how many of its units sit over the line.

This is general information, not legal or tax advice. Confirm your own filing with a New York real estate attorney or your CPA.

NYC Condos $1M and Up

Manhattan and Brooklyn condos in the price range the surcharge reaches

View All

Active NEW

$1,500,000

350 E 18TH Street #10C

Gramercy Park

1 bd 1 ba 660 sf

View Details Tour

Condo · 2025 RLS #RLS20098306

Active NEW

$4,375,000

350 E 18TH Street #PHB

Gramercy Park

3 bd 4 ba 1,762 sf

View Details Tour

Condo · 2025 RLS #RLS20117460

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.

Sources

Facts on this page were checked against these sources on October 9, 2026.

• NYC Department of Finance, Supplemental Market Value Roll, tax year 2027, published July 24, 2026, analyzed by miltoncoste.com, unit valuations
• NYC Department of Finance, non-primary residence surcharge, tiers, rates and the "or greater, but less than" wording
• NY Tax Law Article 30-C, sections 1350 to 1356, the surcharge schedule