Key facts
- A state appeals judge has lifted a pause on New York City's pied-à-terre tax.
- The lawsuit challenging the tax's rollout was brought by three homeowners.
- One plaintiff, Simon Hedley, had his administrative appeal approved, exempting him from the tax.
- The city's finance department can now proceed with sending notices and processing administrative appeals.
- The case will return to court on August 31 for a hearing on the tax's legality.
A New York state appeals judge has reversed a previous decision that had paused the rollout of the city's pied-à-terre tax. The tax, aimed at high-value properties owned by non-residents, faced a temporary roadblock due to a lawsuit filed by three homeowners.
The city's legal team successfully argued that one of the plaintiffs, Simon Hedley, had his administrative appeal approved, effectively mooting his claim and undermining the basis for the pause. Hedley, who received a surcharge notice, was found to be exempt as the property is his primary residence.
Despite this procedural victory for the city, the underlying legal challenge to the tax's implementation is not over. Randy Mastro, the attorney for the homeowners, stated that the administration is "harassing and threatening New York City homeowners" and remains confident in securing permanent relief for them.
The appeals court order allows the city's finance department to resume sending tax notices, process approximately 4,300 pending administrative appeals, and enforce the September 18 deadline for proving residency. The city is relying on the projected $500 million in surcharge revenue through fiscal 2028 to help close a nearly $12 billion budget gap.
The case is scheduled to return to the Staten Island court on August 31 for a hearing on the merits of the petition. The city faces a November 15 deadline to mail tax bills, with the first installment due in January 2027.