NYC Pied-à-Terre Tax: Court Cancels Notices, City Appeals

Key Takeaways

• A New York state court canceled roughly 17,000 NYC non-primary residence surcharge notices on September 29, 2026, in O'Brien v. City of New York.
• The court held that the Department of Finance (DOF) did not make the individualized primary residence determination that N.Y. Tax Law section 1352(a) requires before sending a notice.
• The city appealed to the Appellate Division, Second Department, on September 29, 2026, and takes the position that the appeal stays the order. The surcharge itself was not challenged and remains law.
• The decision does not address the October 6, 2026, deadline, so owners who received a DOF notice should still file by that date.
• A timely filing with complete, supportable documentation preserves your position whichever way the appeal resolves.

If you received a Department of Finance (DOF) notice about the non-primary residence surcharge, you should still file your submission by October 6, 2026. A state court canceled the notices on September 29, but the city appealed the same day and takes the position that the ruling is stayed.

What Did the Court Decide About the NYC Pied-à-Terre Tax?

In O'Brien v. City of New York, Justice Wayne M. Ozzi held that DOF did not make the individualized initial determination of primary residence that N.Y. Tax Law section 1352(a) requires before a notice is sent. DOF declined to use available income tax data, including 2024 returns. The court found that this refusal shifted to homeowners the burden of proving where they live, and it held that the shift violated due process. The court also found that publishing a roll of more than 900,000 properties, when 98% to 99% were not subject to the surcharge, was capricious and without legal support.

What Did the Court Order?

1. DOF must remove the supplemental roll from its website. It may replace the roll with a list limited to properties actually subject to the surcharge.
2. DOF must cancel all previously mailed notices, roughly 17,000.
3. DOF must use the most recent available tax and other information in its initial determinations, for the current fiscal year and later years.
4. DOF may send new notices only after an individualized determination. Each notice must identify the property, state the factors considered, including days of occupancy, disclose the supporting records, state the value threshold, explain the right to challenge the final determination, and warn of the possible 50% penalty.
5. The exemption process is eliminated as improper burden shifting.

The surcharge itself was not challenged and remains law.

The City's Appeal

At 5:45 PM on September 29, 2026, the city filed a notice of appeal to the Appellate Division, Second Department, from the entire decision and order. The city has stated that it will invoke a stay.

What Does the Appeal Mean for Property Owners?

The City’s position is that the appeal automatically stays the enforcement of the Court’s order. Accordingly, the City’s position is that the DOF may keep administering the surcharge and treat the mailed notices as effective while the appeal proceeds. The stay does not reverse the decision. The same dynamic occurred in August, when the Appellate Division stayed the court's temporary restraining order on August 13, 2026.

The decision does not mention the October 6 deadline. The order cancels the notices and eliminates the exemption process, so it is worth wondering whether the deadline survives if the order takes effect. Until DOF says otherwise or a court vacates the stay, we treat the deadline as in force.

What Should You Do Before October 6?

1. If you received a notice and believe your property is not subject to the surcharge, appeal by October 6, 2026.
2. Submit complete, accurate, and supportable documentation.

A timely filing costs little and preserves your position whichever way the appeal resolves. A missed deadline risks forfeiting the DOF process if the stay holds. We will provide updates on DOF guidance and the appeal.

Please contact your EisnerAmper State and Local Tax professional with questions about your property.