On Tuesday, Sept. 29, New York State Supreme Court Justice Wayne Ozzi sided with homeowners challenging New York City’s pied-à-terre tax rollout. Justice Ozzi invalidated the selection criteria used by the Department of Finance and the notices issued under that process, directing the City to make the individualized determination required by state law before sending new notices.

The homeowners argued that the Department of Finance had reversed the statutory process by requiring recipients to prove that their homes were exempt before the agency determined that the properties were non-primary residences. The court agreed that the City could not rely on those notices as issued and must disclose the records used to classify a property as a non-primary residence. The City may appeal, so the ruling may not be the final word on implementation.

The rollout dispute is not the only case now before the courts. A separate lawsuit filed in Suffolk County by Stephen Wynn, Wilbur Ross, and Hilary Geary Ross challenges the pied-à-terre tax on constitutional grounds, alleging that it unfairly imposes a property-tax burden on nonresidents of New York City. That case is distinct from the homeowners’ successful challenge to the City’s notice process and remains pending.

The new annual surcharge generally targets certain New York City residences that are not used as a primary residence, including one- to three-family homes valued above $5 million and condominium or cooperative units valued above $1 million. The original notices prompted questions about how properties were selected, what information the City relied on, and how owners could verify or challenge the determination.

Justice Ozzi’s ruling addresses those procedural concerns; it does not, by itself, strike down the tax. The separate Suffolk County action presents a broader challenge to the law’s validity.

What Property Owners and Co-op Boards Should Do Now

• Keep any notice, exemption submission, determination, and supporting documentation already received or filed.
• Watch for a replacement notice, revised instructions, new deadlines, or an appellate ruling before taking further action.
• Co-op boards and managing agents should be prepared to provide share-allocation, ownership, and building-assessment information if residents need it to evaluate a future notice.
• Consult counsel promptly about how the ruling affects a specific property, particularly if a filing is pending or a prior notice identified the property as potentially taxable.

The litigation is developing quickly, and additional guidance from the City or the courts may change the next steps for affected owners.