New York City is moving ahead with its new pied-à-terre tax, despite a pending court challenge and a temporary restraining order that briefly blocked parts of the rollout — including publication of a supplemental property roll and enforcement of an exemption application deadline.
Pied-à-terre tax basics
The new non-primary residence property surcharge, or pied-à-terre tax, was put in place as part of New York state’s fiscal year 2026-2027 budget.
The budget legislation authorizes New York City to impose a surcharge on residential property that does not serve as a primary residence, effective for fiscal years beginning July 1, 2026, to June 30, 2031.
The surcharge applies to one- to three-family homes valued at $5 million or more, as well as condominiums and co-ops valued at $1 million or more, when their owners maintain a separate primary residence. Properties that are the primary residence of the property owner, a tenant, or a subtenant are not subject to the surcharge.
The city has begun implementing the new law, including mailing notices to about 17,000 property owners identified as potentially subject to the surcharge. It also published a list of over 900,000 property owners that may fall within the pied-à-terre tax’s scope.
While exemption requests were originally due at the end of August, the city recently announced that homeowners have until September 18, 2026, to apply for an exemption.
Implementation challenged in court
However, on August 7, a group of property owners filed suit in New York state court, alleging that the city “arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge.” Under the statute, the plaintiffs contend, the city had a duty to assess and determine which properties fall within the scope of the new tax.
The homeowners argue the city should have used all information available to it to make initial surcharge liability determinations. Instead, they say, the city relied only on “federal and state tax returns and records related to certain property tax exemptions.”
They also take issue with the city’s publication of the “supplemental roll,” which includes “the owners’ names, addresses, and assessed fair market values of more than 900,000 residential properties.” The plaintiffs argue this list has “caused mass confusion” and led to “unwanted scrutiny of homeowners’ personal information.”
Judge Wayne Ozzi granted the plaintiffs’ request for a temporary restraining order on August 10. The TRO bars the city from continuing to post the supplemental roll on its website and from taking further action to assess the surcharge based on the supplemental roll or mailed notices. It also bars the city from enforcing the September 18 deadline for exemption applications.
Judge Ozzi also set a hearing in the case for August 31.
A day later, the city filed a notice of its intent to appeal — which it contends stays the TRO.
Next steps for affected property owners
Marisa Friedrich, director of Kaufman Rossin’s Tax Resolution and Advisory practice, said that despite the TRO, “owners should not assume that enforcement has been permanently halted.” New York City immediately appealed the order, she told Checkpoint, which stayed its effect. The city also has indicated it will continue to implement the surcharge during the litigation, said Friedrich.
“Until the litigation is resolved, owners should continue to evaluate whether the surcharge applies to them, whether they qualify for an exemption and whether they have grounds to challenge the assessment,” Friedrich advised.
Kaufman Rossin is hearing from property owners who are uncertain how to respond to the pied-à-terre tax. “Many were already trying to determine whether the surcharge applied to their particular circumstances, and the litigation has added another layer of uncertainty,” said Friedrich.
She advises that property owners “be prepared to make informed decisions as the situation develops and avoid being caught unprepared if the surcharge ultimately moves forward.”
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