Pied-a-Terre Tax Phase 2 in July 2028: Who Drops Out

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

On July 1, 2028, the pied-a-terre surcharge on condos and co-ops is scheduled to move to a $5,000,000 threshold, and on the Department of Finance roll as published July 24, 2026, 17,330 of today's 17,750 over-the-line units sit below that figure. Only 420 units are at or above $5,000,000 today, and they would pay a much lower rate than they do now. The catch is that Phase 2 is built on a new assessed-value system the city has not finalized, so these are today's numbers laid over a future schedule, not a forecast.

I run the surcharge math on every second-home purchase I price, and the tempting read of Phase 2 is to wait out Phase 1. The honest answer starts with the structure. Phase 1 runs from July 1, 2026 to June 30, 2028. Phase 2 runs from July 1, 2028 to June 30, 2031, when the tax sunsets unless it is renewed. Frame everything past June 2028 as scheduled, not settled.

Phase 1 and Phase 2 side by side

Phase 2 puts condos and co-ops on the schedule that houses already use. The bands at $15,000,000 and $25,000,000 come from that house schedule.

Who drops out

Take the 17,750 condo and co-op units valued at $1,000,000 or more on the July 24 roll. If each kept today's valuation, 17,330 fall under $5,000,000 and would owe nothing under Phase 2. That group, 16,574 units in the 4% band and 756 in the 5.25% band, carries $1,109,790,657 of the $1,665,954,421 in annual Phase 1 exposure.

Who stays, and what changes for them

Those 420 units owe $556,163,764 a year under Phase 1 at 6.5%. Laid over the Phase 2 schedule at today's values, the same units come to about $98,857,220 a year, roughly 82% less. A unit valued at $5,000,000 goes from $325,000 a year to $40,000. Across the whole roll, the illustrative Phase 2 total is about 6% of the Phase 1 total. Treat that as a ceiling on the mechanics, not a prediction, because the values themselves will be reset.

NYC Condos $1M and Up

Manhattan and Brooklyn condos in the price range the surcharge reaches

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Active

$1,149,000

111 Fulton Street #806

Financial District

2 bd 3 ba 1,213 sf

View Details Tour

Condo · 1940 RLS #RLS20107310

Active

$1,295,000

340 E 23rd Street #3D

Gramercy Park

2 bd 2 ba 1,082 sf

View Details Tour

Condo · 2007 RLS #RLS20099276

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.

Who gets pulled in

The roll cannot answer this. A condo or co-op whose value under the new system comes out above $5,000,000, but which sits below it today, would enter the surcharge in Phase 2 even though it never paid in Phase 1. What the roll can show is how close the line is: 70 units sit between $4,500,000 and $4,999,999, and 71 between $5,000,000 and $5,499,999. A re-valuation that moves values by a few percent would shuffle some of them across. Houses are not affected, since the 6,802 houses valued at $5,000,000 or more already sit on the same schedule; their Phase 1 exposure is $536,836,489 a year.

What I would take from this

• Do not buy or sell on the assumption that the tax shrinks on July 1, 2028. The rule is on the books as scheduled, the value system behind it is not final, and Albany or the courts can change either. The appeal in the notice case and two constitutional suits are still open.
• If your unit is valued between $1,000,000 and $5,000,000, you are exposed for two tax years under Phase 1. File the exemption if you qualify; the filing guide lists the documents.
• If your unit is close to $5,000,000, read the valuation off the bill and watch for the new assessed-value system when the Department of Finance publishes it.
• Weigh a two-year hold, a lease or a sale in the sell or lease comparison before you decide.

For the cliff that governs Phase 1, see the $1,000,000 line explained. The pied-a-terre tax hub has the rest of the roll.

This is general information, not legal or tax advice. Confirm your own filing with a New York real estate attorney or your CPA. The Phase 2 figures apply the scheduled rates to Phase 1 roll values and are illustrative only.

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 and house valuations
• NYC Department of Finance, non-primary residence surcharge, Phase 1 thresholds and rates
• NY Tax Law Article 30-C, sections 1350 to 1356, the phases and the June 30, 2031 sunset