I received a pied-à-terre tax notice for my primary residence in NYC. How do I fight this?
- A judge paused the tax rollout, potentially delaying the timeline to respond to surcharge notices
- But property owners should still prepare the paperwork needed to file for an exemption if eligible
The judge-ordered pause could delay the timeline to respond to a second-home tax notice. The city is expected to appeal the decision.
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I received a pied-à-terre tax notice for my primary residence in New York City. How do I fight this?
If you received a notice from the Department of Finance (DOF) that says your primary residence may be subject to a pied-à-terre tax, you are not alone. “A lot of New York City residents got those notices,” said attorney Seth Feldman, partner at Romer Debbas. “Even though many may end up being exempt, it is really scary to get a notice that you may be subject to a minimum $40,000 additional tax bill come January 1st.”
The notices follow the release of a database of roughly 900,000 properties for which the surcharge may be relevant. Although the notices—sent to around 17,000 NYC property owners—are not bills, recipients were asked to submit paperwork by September 18th to prove the apartment or townhouse is a primary residence.
“It was a very sloppy rollout and it created far more panic and anger than was necessary,” Feldman said.
A lawsuit pauses the rollout
The burden to prove primary residency prompted a group of property owners to file a lawsuit against the city last week. In response, a judge ordered a pause in the rollout of the pied-à-terre tax. This could delay the current timeline to respond to a second-home tax notice. The city is expected to appeal the decision.
When the second-home surcharge was passed as part of the New York State budget at the end of May, attorney Benjamin Williams, head of the property tax department at Rosenberg & Estis, predicted the collection process was “going to be messy.”
Why you should still prepare your paperwork
Even with the court-ordered pause, anyone with an original July surcharge notice should still get their paperwork ready.
“If the city wins the lawsuit, the pied-à-terre tax is back in effect,” Williams said. “If the plaintiffs win, the city would get delayed in implementing the pied-à-terre tax, but it would eventually get back on track.”
The tax applies to non-primary residences worth $5 million or more on the open market. Because the city doesn’t currently use actual sale prices to calculate property taxes, the first phase of the tax’s implementation will use a DOF market value of $1 million as the equivalent of a $5 million market value.
What documents you'll need to prove residency
To ensure your primary residence is exempt, the DOF has issued a list of the documents you need to upload to their portal. This might be a recently filed federal or state tax return, driver’s license or other DMV-issued identification, or voter ID card.
If there’s a tenant living in the apartment, you will be asked to provide a copy of the lease and further proof of the rental arrangement like a utility bill or proof of the rent payment.
The gray areas creating headaches
There are plenty of other situations where there is uncertainty. Feldman is looking for answers from the DOF for clients who own and live in two- or three-family homes with vacant ground-floor apartments that they use for visiting family members. If 75 percent of the property is exempt because it is the primary residence of New York residents but 25 percent of the property is a pied-à-terre, it’s not clear if the owner is subject to a percentage of the surcharge.
“I certainly hope I will get answers before the filing deadline,” Feldman said.
Another situation that needs clarification involves buyers who purchased a property as their primary residence but have not yet moved in because of ongoing renovations. These owners may still be subject to the surcharge. “There is no exception in the law for property that’s undergoing alterations,” Feldman said. “That is a huge miss.”
Challenging your property's valuation
There will also likely be many property owners who choose to challenge the market value determinations of their apartment or townhouse. These challenges are made through the NYC Tax Commission, an independent agency. Appeals for co-ops and condos must still be filed by March 1st, 2027 and for one- to three-family homes the deadline is March 15th, 2027.
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