A second home used to be a lifestyle question. As of July 1, 2026 it's an annual invoice, and every owner over the threshold now runs the same three-way comparison — usually at the kitchen table, often with family, sometimes with an estate attorney on speaker. Here is that comparison done honestly, including the parts a brokerage might be tempted to soft-pedal.
Door one: keep it and write the check
A $1.4M-DOF condo: $56,000/yr. A $3.5M: $183,750. A $6M: $390,000. Flat rates on the full value, on top of your existing taxes, every year the home stays non-primary. Two reasons this door isn't always irrational: Phase 2 (from July 1, 2028) re-bases condos and co-ops on comparable-sales values with a $5M threshold at 0.8%–1.3% — a large share of today's payers, especially co-ops with high fractional-share values, likely drop out entirely; and the statute sunsets June 30, 2031 unless renewed. An owner who deeply values access, expects to fall under the Phase-2 line, and can absorb two years of Phase-1 bills is making a defensible choice — if it's made with the real numbers, not denial.
Door two: lease it for a year
A bona fide 12-month arm's-length lease to a tenant who makes it home takes the surcharge to zero and replaces it with rent. The gross-to-net honesty: subtract a broker fee (typically 12–15% of the first year's rent), management if you're not local (8–12%), reserves and vacancy risk. Even after all of it, on most over-threshold homes the swing versus door one is enormous — avoiding the surcharge and collecting net rent routinely moves $150,000+ a year on a $2M-class condo. The two costs the spreadsheet won't show: your keys (zero personal use, no exceptions, for the full term — a lease you quietly use isn't arm's-length, and DOF's penalty for false paperwork is 50% of the surcharge) and your calendar (finding a real tenant takes weeks; co-op boards add more; the exemption starts with the tenancy, not the intention).
Door three: sell into a market that knows about the tax
Selling ends the exposure and harvests today's price — and today's price increasingly reflects the tax. Buyers shopping the second-home segment now underwrite the surcharge as a carrying cost, and the pressure concentrates in the $1M–$5M DOF band that pays heavily in Phase 1: more of those owners are choosing to exit at once, while the tax hands their buyers a bargaining line. Selling can still clearly win — for owners who won't landlord, whose use of the home no longer justifies any carrying cost, or where the estate simply needs liquidity. But sell as a decision, not a reflex: the same unit that owes $88,000 this year may owe nothing from mid-2028.
The worked comparison
| — | $1.4M DOF condo | $3.5M DOF condo |
|---|---|---|
| Door 1 — annual surcharge if kept non-primary | $56,000/yr cost | $183,750/yr cost |
| Door 2 — illustrative gross rent | $90,000 income | $180,000 income |
| … less broker (~13% yr 1), mgmt (~10%), reserves | $26,000 in costs | $50,000 in costs |
| Door 2 swing vs. Door 1 (surcharge avoided + net rent) | ≈ $120,000/yr in your favor | ≈ $314,000/yr in your favor |
Illustrative — your DOF value sets the surcharge, the rental market sets the rent, and the free review replaces every line with your unit's actual figures.
Deciding under this month's deadlines
- If a DOF notice has arrived, its clock outranks this analysis — handle the response first, then decide at leisure.
- The surcharge accrues by the year: a decision deferred from August to March is a decision that cost real money.
- Families and estates: run this page's numbers before the family meeting — see the inherited-apartment guide.
Questions owners ask
Should I sell or rent my NYC second home now that the surcharge exists?
Compare three numbers: the annual surcharge if you keep it non-primary (flat 4%–6.5% of DOF market value for condos over $1M), the net income of a 12-month arm's-length lease (which also zeroes the surcharge — a combined swing of roughly $120,000/yr on a $1.4M-DOF condo), and the net proceeds of selling into a market that now prices the tax in. Leasing usually wins the arithmetic but costs all personal use; selling fits owners who won't landlord or need liquidity; keeping can be rational for those likely to drop out at Phase 2's $5M threshold in 2028.
Will the NYC second home tax go away?
Two scheduled changes: Phase 2 (July 1, 2028) re-bases condos and co-ops on comparable-sales values with a $5M threshold at 0.8%–1.3%, which removes many current payers; and the statute sunsets June 30, 2031 unless extended. Neither helps with the bills in between — Phase 1 runs at 4%–6.5% through June 2028.
Does renting a NYC second home part of the year avoid the surcharge?
No. Only a bona fide arm's-length lease of at least 12 months to a natural person using the home as their primary residence qualifies. Seasonal and short-term rentals leave the unit taxable, and a lease the owner quietly keeps using is not arm's-length — false documentation is penalized at 50% of the surcharge.
Three doors, your numbers, one page.
A senior Conquest agent prices all three for your unit — official DOF value and surcharge, realistic 12-month rent net of costs, and a candid sale valuation. Free, no obligation, no listing pitch unless you ask.
Check My Property — FreeDisclaimer. Educational information from Conquest, a licensed New York real estate brokerage — not legal, tax, or accounting advice. Deadlines and figures reflect DOF's published rules and roll as of the date above. Residency has consequences beyond this surcharge — talk to your CPA before changing where you "live."