Co-op and condo owners
Because state law values co-ops and condos as if the building were a rental, so the city’s number is far lower than what the unit would sell for.
The city puts it in plain terms: a co-op or condo it values at $1 million is broadly comparable to a single-family house valued at $5 million. Same policy, two different yardsticks.
Owners keep comparing the threshold to what their unit would fetch on the open market. That’s the wrong number.
The city uses its own market value for the unit, and for co-ops and condos that figure is built from what the building would earn as a rental. It’s a formula, not an appraisal, and it usually lands well under the resale price.
So the question isn’t “is my apartment worth a million.” It’s “what did the Department of Finance say it’s worth.” You can look that up on your own property record.
This surcharge is one of three city rules that changed for Brooklyn owners in 2026.
The bands for units are much steeper than the ones for houses. That surprises people more than the threshold does.
| City market value of the unit | Surcharge rate | Rate on a house at the same value |
|---|---|---|
| $1M to under $3M | 4.0% | No surcharge below $5M |
| $3M to under $5M | 5.25% | No surcharge below $5M |
| $5M and above | 6.5% | 0.8% |
Source: NYC Department of Finance, nyc.gov/npsurcharge. Applies to tax years 2026-27 and 2027-28.
The first $1 million isn’t charged. The rate applies to the value above it, in bands, the same way the house rates work.
Here’s a wrinkle worth knowing. The city says some owners got a letter because their unit receives the co-op or condo abatement but the city didn’t have a sufficient tax filing on record to confirm primary residence.
In other words, the letter can be a paperwork gap rather than a finding. That’s a very different problem, and it’s fixable with documents.
If your unit is your only home, file the exemption application and move on. If a tenant lives there full time, the unit is generally exempt too, and you’ll show the lease plus one more rental document.
A surcharge on an empty second apartment changes the carrying cost every year, not just once. That’s the piece owners underestimate.
There are three honest options and they’re all reasonable depending on the unit: rent it to a full-time tenant and the surcharge generally goes away, keep it and absorb the annual cost, or sell.
We’d want to see the actual unit before saying which. Building, line, floor, maintenance, flip tax and board rules all move the resale number more than a headline does. The Behfar Team sells condos, co-ops and houses across south Brooklyn, and our Madison neighborhood page shows the kind of block-level reading we bring to a price.
It’s on your property record with the Department of Finance, listed as market value for the tax year. That’s the figure the surcharge uses, not your broker’s estimate.
Just the part above. The first $1 million is not charged, and the rate steps up in bands after that.
The surcharge is applied through the property tax system, and the city published a supplemental roll in July 2026 that lists individual co-op units in buildings where at least one unit may be affected. Being listed is not the same as owing. Only owners who received a letter are potentially subject.
Yes. There’s a separate exemption application for cooperative units, and the deadline is September 18, 2026. We break the process down on the response page.
The thresholds and rates above are set for tax years 2026-27 and 2027-28. The city describes this as the first phase.
We’ll price it against what actually closed in your building and nearby, and tell you whether holding still makes sense.
Thresholds, rates and exemption rules come from the NYC Department of Finance. General information about a city rule, not tax or legal advice.
