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About Kooky and Shaka →New York City's Department of Finance has moved the deadline to apply for an exemption from the city's new surcharge on second homes to Tuesday 13 October 2026. Inman reported on 7 October that the change was announced on Tuesday 6 October, the very day the previous deadline was due to expire, and that it is the third extension since the notices went out.
The new date covers residential homes, condominiums and co-operative units alike, and the department's own surcharge page now shows 13 October for both application routes. According to Inman, the city gave the lawsuits challenging the tax and the way it was introduced as its reason.
City figures as reported by Inman on 7 October 2026; the applications count is attributed to The City.
What the surcharge is and whom it reaches
The surcharge, widely called the pied-à-terre tax, falls on homes that are not used as a primary residence. Inman reports that it was passed in May 2026 as part of the 2026-27 New York State budget, that Governor Kathy Hochul proposed it and Mayor Zohran Mamdani backed it, and that it was expected to raise about US$500 million a year. The Department of Finance page gives 28 May 2026 as the date the law took effect.
Two groups of property fall inside it. The first is one- to three-family homes that the Department of Finance values at US$5 million or more. The second is co-op and condo units valued at US$1 million or more. The department explains that the lower threshold for apartments reflects the different way state law values them, so the figure on a notice is the department's market value, not the price a unit would fetch on the open market.
Related readTexas and Florida property tax: exemptions, caps, appeals and billsThe rates rise in three bands for each group, and they are far higher for apartments than for houses.
| Property | Department of Finance market value | Rate |
|---|---|---|
| One- to three-family home | US$5 million to under US$15 million | 0.8% |
| One- to three-family home | US$15 million to under US$25 million | 1.05% |
| One- to three-family home | US$25 million or more | 1.3% |
| Co-op or condo unit | US$1 million to under US$3 million | 4.0% |
| Co-op or condo unit | US$3 million to under US$5 million | 5.25% |
| Co-op or condo unit | US$5 million or more | 6.50% |
Source: New York City Department of Finance, non-primary residence surcharge page, as read on 9 October 2026.
The status of a property is fixed on one day. Inman reports that the taxable-status date for this first year was 5 January 2026, months before the law was passed, which is one of the points the legal challenges turn on. The department says the charge will appear on the property tax bill due on 1 January 2027.
How an owner shows a home is exempt
The surcharge generally does not apply, the department says, where the property is the primary residence of the owner, of a tenant or subtenant, of an immediate family member of the owner, of the sole beneficiary or beneficiaries of a trust, or of the individuals who together hold a majority interest in a company or partnership that owns it.
The burden of showing this sits with the person who received a notice. Each occupant is asked for a most recent federal or state tax return, or a driver's licence or other identity document issued by the motor vehicles department. A home let to a tenant needs more: a current lease with one further rental document such as a utility bill or proof of rent paid, or a signed tenant affidavit with two further documents.
Receiving a letter is not the same as owing the tax. The department states that a notice may simply mean its records did not show a matching tax filing, and that appearing on the supplemental roll it published on 24 July 2026 does not mean a home is subject to the surcharge. After an application, the department sends a determination by letter and email, and a refusal can be taken to the city's Tax Commission.
Related readUAE property tax: VAT on sales and rents, corporate tax on incomeA short let is unlikely to count as a tenant's primary residence
A tax partner at the law firm Herrick told Inman that the exemption for rented homes requires a one-year lease at fair market rent, so short-term holiday lets are unlikely to qualify.
A rollout corrected in public
The numbers show how much of the first mailing has already been unwound. According to city data reported by Inman, notices went to about 17,000 owners in July. The department has since received about 9,300 applications, a count Inman attributes to the news outlet The City, and has approved more than 5,200 exemption requests. About 4,000 applications were still under review at the time of the report.
Earlier figures trace the path. The deadline had already been pushed from 18 September to 6 October, and Inman reported on 29 September that the city had approved about 4,700 proofs of residency as of 16 September, and that in August it sent new notices to more than 11,000 owners after receiving 2025 state tax data. Benjamin Williams, who leads the property tax department at the law firm Rosenberg & Estis, told Inman that the Department of Finance reversed more than 1,200 of its initial determinations after the preliminary data arrived in August.
Practitioners describe a hurried season. "It's been a scramble," Heather Domi, an agent at Douglas Elliman, told Inman on 5 October. She told the same outlet two days later that the latest extension was needed because the lawsuits had left owners unsure what to do, that her team has been telling clients to meet the deadline whatever the courts decide, and that one week is not really enough for owners who are contesting their valuation or for landlords who must gather documents from tenants.
The Staten Island ruling and the city's reply
The case that has shaken the timetable does not attack the tax itself. It was brought by homeowners who argued that the Department of Finance had not worked out who actually owed the surcharge before setting out to collect it, and that the notification process confused owners.
Related readUS home sale exclusion: the US$250,000 limit and its three testsOn Tuesday 29 September, Inman reported, State Supreme Court Justice Wayne Ozzi, sitting in Staten Island, agreed with them. He ruled that the notices were arbitrary and capricious and ordered the city to start again: cancel the notices sent to about 17,000 owners, take down its online list of nearly 1 million potentially affected properties, publish a list limited to the properties that owe the tax, and send new notices explaining each determination. He had issued a temporary restraining order in the case in August.
The homeowners' lawyer, Randy Mastro of Dechert LLP, said after the ruling that the administration should make an individual determination for each property before billing. By his account, about 7,000 of the 17,000 recipients had either been told they did not owe the tax or had completed an exemption application by the time of a hearing on 31 August.
The city's position is that the ruling is mistaken and that the surcharge carries on. "Today's decision is wrong, and we will invoke a stay of the injunction," Matt Rauschenbach, a spokesperson for the mayor, said in a statement reported by Inman. The city appealed the same night, relying on an automatic stay that pauses the order while the appeal runs.
The appeals court has not yet decided the appeal. Inman reported on 7 October that a state appeals court has put the ruling on hold, so that the city may keep implementing the surcharge in the meantime, and that the court has said it will rule by 10 November, a date Inman attributes to Bloomberg.
Related readWhat US homeowners can deduct: mortgage interest, points and SALTOn the extension itself, the Department of Finance placed the blame on the litigation. "These meritless lawsuits have created a lot of unnecessary confusion," its spokesperson Jae Ko said in a statement Inman attributes to Bloomberg Tax. Jason Haber, a co-founder of the American Real Estate Association, read the same facts the other way and called for the tax to be halted. "It is proof that it is broken," he said in a statement reported by Inman, of a process that has now been extended three times.
Two suits against the tax itself
Two further cases, both pending, challenge the law and not the letters. One was filed on Monday 28 September by Florida residents who own property in New York City. As Inman describes it, they argue that the tax is unconstitutional because it targets only non-residents.
The other was filed on 29 September, hours before the Staten Island ruling, against the State of New York by a group of homeowners and a New York City co-op. Inman reports that the Real Estate Board of New York is paying for it, and that the board says it is not funding the Staten Island case. The complaint alleges that the surcharge discriminates against non-residents and applies retroactively, in breach of the Privileges and Immunities, Dormant Commerce, Due Process, Equal Protection and Contracts Clauses, and that it breaches state limits on real estate tax revenue and the home rule requirements for laws aimed at a single city. The board's president, James Whelan, told Inman the tax reaches New Yorkers it was never meant to reach.
Related readUS property tax delinquency hits 5.2% on mortgages without escrowThose are the plaintiffs' claims. The state and the city defend the surcharge, and lawyers outside the cases have been careful about what the first ruling means. William McCracken and David Fitzhenry of the law firm Moritt Hock & Hamroff told Inman that the Staten Island proceeding never put the law itself at risk of being struck down.
What it changes at the closing table
For agents and closing attorneys the surcharge has become a line to negotiate. Andrew Freedland, co-chair of the co-op and condo practice at Herrick, told Inman he has drafted contract provisions that split the surcharge between buyer and seller according to the days each owns the home during the July-to-June tax year, settled at closing by cheque or credit. Co-op boards, he said, have asked whether to amend their proprietary leases or hold part of a seller's proceeds in escrow, and he noted that the city can pursue the tax after a sale has completed.
The dates that follow
Owners who miss 13 October are not left without a route. According to the accounting firm EisnerAmper, cited by Inman, they can seek review by the Tax Commission through 1 March or 15 March 2027. The Department of Finance adds that a wrong valuation is challenged at the Tax Commission, and that the commission will rule on primary residency only where the value is being challenged too.
- 29 September 2026A Staten Island judge orders the city to cancel the notices and restart. The city appeals that night.
- 6 October 2026The previous deadline expires and the department announces a third extension.
- 13 October 2026Exemption applications are due for homes, condos and co-ops.
- By 10 November 2026The appeals court has said it will rule on the city's appeal.
- 1 January 2027The property tax bill that carries the surcharge falls due.
Between those last two dates sits one more. Mr Mastro has said the city told the court it would not invoice the surcharge until 15 November, five days after the appeals court's stated date, and would not collect it until 1 January.
The second year will be tighter still. Mr Williams told Inman that the Department of Finance will have about six weeks between the 5 January taxable-status date and its 15 February deadline for sending notices. The aim, in his view, should be to avoid mistakes before the notices go out, not to correct them once owners have received one.
Kooky, from Shaka
Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
