Brooklyn owners
For almost every house in Midwood, Madison and Marine Park, no. The surcharge on a one, two or three family home starts at $5 million of city-assessed market value.
The rule that catches Brooklyn owners off guard is the other one. Co-op and condo units get pulled in at $1 million, not $5 million, and about 17,000 owners citywide have already been sent a letter.
New York City added an annual charge on homes that aren’t used as somebody’s primary residence. The city calls it the non-primary residence property surcharge. Everyone else calls it the pied-a-terre tax or the second-home tax. It took effect July 1, 2026.
It is not a transfer tax and it is not a one-time bill. It’s an extra yearly amount that shows up on the property tax bill due January 1, 2027. It’s one of three city rules that changed for Brooklyn owners this year.
Here are the thresholds and rates the Department of Finance published for tax years 2026-27 and 2027-28.
| Property type | City market value | Surcharge rate |
|---|---|---|
| One, two and three family homes | $5M to under $15M | 0.8% |
| $15M to under $25M | 1.05% | |
| $25M and above | 1.3% | |
| Condo and co-op units | $1M to under $3M | 4.0% |
| $3M to under $5M | 5.25% | |
| $5M and above | 6.5% |
Source: NYC Department of Finance, non-primary residence property surcharge, nyc.gov/npsurcharge.
This is the part causing most of the panic we’re hearing. On July 24, 2026 the Department of Finance published a supplemental market value roll. That roll includes every one, two and three family home in the city, plus every co-op and condo property.
Being on the roll doesn’t mean you owe anything. The city says plainly that the vast majority of properties on that list will not be subject to the surcharge.
Only the roughly 17,000 owners who were mailed a “You may be subject to…” letter are potentially on the hook. If no letter came to you, the roll is just a list.
The surcharge doesn’t apply if the property is the primary residence of any one of these people.
Two of these matter a lot around here. A house where your married children live is generally exempt, because they’re immediate family. A house you rent to a tenant who lives there full time is generally exempt too. Plenty of local owners assumed an investment property was automatically taxed. It usually isn’t.
Ownership structure alone doesn’t trigger the surcharge. What the city looks at is who lives there. If the people holding a majority interest in the entity use it as their primary home, or the sole trust beneficiaries do, the exemption applies.
You’ll need paperwork to prove it. For an entity, that means the operating agreement, trust agreement or articles of incorporation, plus a majority interest affidavit. For a family member, a birth or marriage certificate.
We walk owners through what the response actually requires and the September 18 deadline on a separate page.
For most Brooklyn homeowners, no. A Midwood two-family isn’t close to $5 million, so the surcharge isn’t a reason to do anything.
The owners with a real decision are the ones holding a second property that sits empty. An empty apartment worth $1.2 million now carries a yearly charge on top of maintenance, taxes and carrying costs. Renting it to a full-time tenant removes the surcharge. Selling removes it too.
That’s a math question, and it’s specific to the property. The Behfar Team has worked Midwood, Madison and Marine Park from our office on East 23rd Street for years, and we’d rather tell you the surcharge is irrelevant to your block than talk you into a sale. If you want the numbers on a second property, we’ll price it against what actually sold near it. Our Midwood market page shows how we read pricing street by street.
Not if the tenant lives there as their primary residence. The city treats an arm’s length rental to a full-time tenant as exempt. You’ll be asked for the lease plus a second rental document, like a utility bill or proof of rent payment.
Because co-ops and condos are valued differently under state law, as if the building were a rental. The city says a co-op or condo it values at $1 million is broadly comparable to a single-family home at $5 million. That’s the whole reason the thresholds differ.
File the exemption application. The city sent letters wherever its records couldn’t confirm primary residence, so a letter is a question, not a bill. The deadline is September 18, 2026.
The charge appears on the property tax bill due January 1, 2027.
You can still challenge it with the New York City Tax Commission before the tax is levied. That route has a catch worth understanding first, and we cover it on the response page.
We’ll tell you straight whether this touches you, and what your Brooklyn property is worth in today’s market. No pressure to list.
Rules, thresholds, deadlines and exemption categories on this page come from the NYC Department of Finance. This is general information about a city rule, not tax or legal advice. Talk to your accountant or attorney about your own situation.
