Appeals court lets NYC pied-à-terre tax proceed; Sept. 18 deadline holds
The September 18 exemption deadline stands while the tax's legality is litigated. Owners who want to avoid the surcharge must act by then.
On Thursday, a Brooklyn appellate judge allowed New York City to keep implementing its pied-à-terre tax, setting aside a Staten Island judge's order that had blocked the rollout days earlier, according to Financial Planning. The September 18 deadline for owners to apply for exemptions remains in place while the broader legal challenge continues.
Governor Kathy Hochul signed the tax in May. It reaches single-family homes worth $5 million or more. Apartments worth $1 million or more are covered too, unless the owner uses them as a primary residence. The Department of Finance has mailed 17,000 notices to owners who may owe the surcharge. It also posted an assessment roll covering nearly 1 million residential properties. The lawsuit contends the roll is overinclusive; hundreds of thousands of properties below the thresholds appear on it, the plaintiffs say, creating what they call 'mass confusion.'
Staten Island Justice Wayne Ozzi had halted the rollout on Monday and set an August 31 hearing. Appellate Judge Phillip Hom stayed that ruling Thursday until a higher court decides whether to take the case. Randy Mastro, the homeowners' attorney, argued in a filing that letting the stay go forward would 'effectively circumvent' Ozzi's order, since appellate proceedings will outlast the exemption window.
For advisors, the tax's legality is the city's problem; the deadline is the client's. The city has said its list 'includes, but is not limited to' properties that may be subject to the surcharge. Owners should be asked whether they received a notice, and whether the property is a primary or second home. A $5 million townhouse should trigger the question. So should a co-op that crossed the $1 million mark. Permanent residents who received notices should apply for an exemption by September 18, even if the city's records look wrong. Waiting for the lawsuit to resolve the misidentification issue is a bet that the deadline will move. This week's ruling suggests it will not.