Pied-a-Terre Enforcement Merry-Go-Round: NYC Surcharge on Non-Primary Residences Encounters Legal Challenges

Taxpayers in New York City who may be subject to a surcharge on secondary and non-primary residences may be experiencing some whiplash after several changes in enforcement happened in quick succession. For now, the City may enforce the notices that have already been sent out, but challenges to the law will continue to work their way through the legal system.

What Changes Happened?

On August 10, 2026, a Staten Island judge placed a temporary hold on the enforcement of the New York City surcharge on secondary/non-primary residences, commonly referred to as the Pied-a-Terre Tax. The City filed an appeal within hours of the order, which it claimed halted the order until further proceedings could commence. On August 13, 2026, a New York Appeals Court temporarily stayed the August 10 order. Accordingly, enforcement of the surcharge, including the deadline of September 18, 2026, may resume – for now.

It is important to note that the temporary order did not strike down the tax. Instead, it merely paused any enforcement until further proceedings commenced.

What Did the Original Order Address?

The case was brought by several homeowners who are challenging the rollout of the tax on administrative grounds. Under the order, the New York City officials or their representatives must appear in court on August 31, 2026, and show cause as to why a permanent order should not be made that would:

1. Declare that the mailed notices do not constitute proper notice under New York tax law and are without legal effect,
2. Vacate the use of the supplemental roll on the grounds that it does not follow New York state tax laws, and that the publication of the names, addresses, and property values of more than 900,000 New York City homeowners was not required or permitted under any law, including any future publications, and
3. Vacate the mailed notices on the grounds that the City failed to conduct an initial, individualized determination as required under the law before mailing the notices, and shifted the burden of proof to homeowners to show that they are not subject to the tax in violation of the law.

Under the order, New York City was enjoined from:

1. Continuing to post homeowner information on the New York City Department of Finance website related to the surcharge,
2. Imposing, assessing, or collecting the surcharge against any homeowner identified on the supplemental roll or who received a mailed notice, unless New York City first makes an initial individualized determination and provides proper notice under New York state tax law, and
3. Enforcing any deadlines set forth in the mailed notices, as extended to September 18, 2026, against any homeowner who received a notice.

What Happens Now?

The City appealed the decision almost immediately, and the Appeals Court temporarily stayed the order. While the order is stayed, the City may enforce the notices that were sent out to thousands of taxpayers, and these taxpayers will continue to bear the burden of proving they are not subject to the tax. The City and the homeowners will appear in court on August 31, 2026.

This is an ongoing situation and may change quickly. Our team will continue to monitor the proceedings carefully. If you have received a notice regarding the surcharge, reach out to one of the State and Local Tax team members below.