A Staten Island judge has issued a temporary restraining order (TRO) on New York City’s Pied-à-Terre surcharge. The TRO pauses the City rollout of the new surcharge as a homeowner lawsuit proceeds.
The tax was finalized last month and applies to residential one- to three-family homes, known as “Class 1” properties, as well as “Class 2” properties such as condominiums and co-ops, that do not qualify as primary residences under NYC rules and do not qualify for any exemptions. The New York City Department of Finance was expected to begin issuing bills to owners of non-primary residences this month.
Under the TRO, the City must take down the public property roll and cannot issue new notices, grant exemptions or collect the surcharge for now. It also prevents NYC from enforcing the exemption-application deadline, which was recently extended and now falls on September 18. The next hearing on the restraining order will take place at the end of this month.
The suit challenges the City’s rollout, not the tax itself — the underlying state law stands. And critically, no deadline has been formally rescinded; the court has merely paused enforcement for now. Moreover, the pause imposed under the TRO is fragile. The City has signaled it will move quickly to seek relief from the order, and certain appellate procedures could allow the rollout, along with the associated September 18, 2026, deadline to be reinstated on short notice.
If a property owner received a notice, they should keep assembling their primary-residence documentation and be prepared to file their exemption application by September 18, 2026, as if nothing has changed. A missed deadline is unforgiving if the rollout resumes. It should also be noted that a property can be subject to the surcharge even if a property owner never received a notice.
We will continue to monitor the City’s next moves and the upcoming hearing scheduled for August 31 and will circulate another update as soon as anything noteworthy becomes available.
Reach out to our State and Local Tax Services Team before proceeding with any exemption applications or appeals, as these matters can be complex.
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