New York City Council Committees on Finance and Governmental Operations, State & Federal Legislation 

Thank you, Chairs Lee and Brewer and members of the committees, for the opportunity to testify on the implementation of the New York City surcharge on non-primary residents, more commonly known as the pied-a-terre tax (the “Tax”). The Partnership for New York City mobilizes private sector resources and expertise to advance New York City’s standing as a global center of economic opportunity, upward mobility, and innovation. We are a nonprofit organization whose members are preeminent business leaders and companies that support nearly 1 million jobs in New York City and deliver approximately $370 billion in economic output. 

The Partnership has serious concerns about the city’s implementation of the Tax, which has been chaotic at best. The Tax was enacted as part of New York State’s 2026-2027 budget and is administered by the New York City Department of Finance (the “DOF”). The DOF initially caused confusion by publishing a list of nearly a million properties “related to” the Tax.”¹ This list was not needed by the city to determine who would have to pay the Tax and included many properties valued below the threshold subject to the Tax as well as many homes of full-time city residents. Thus, this list served no purpose other than to complicate the process and cause fear among property owners. 

Even more problematic, the DOF did not follow its own rules for determining which properties are subject to the Tax. The DOF’s rules require it to treat all properties as primary residences unless the DOF’s records indicate otherwise.² The DOF must make an annual “initial determination” on whether a covered property is a primary residence of a covered owner using documents and records such as federal and state income taxes, certain tax exemptions, or existing property tax exemptions. Instead of following its own rules, the DOF sent 17,000 letters to property owners asking them to prove that they are not subject to the Tax. Shifting the burden to homeowners in this way is unnecessary and unacceptable. 

The Partnership encourages the mayor and the DOF to take responsibility to ensure these mistakes are corrected. The DOF should take down the list of properties and properly assess which homeowners meet the criteria for payment of the Tax. The DOF should also clarify outstanding questions such as what the process will be for a city resident who does not request an exemption in time. 

Thank you. 

¹ Department of Finance, Non-primary residence property surcharge: Who is subject to the surcharge, https://www.nyc.gov/site/finance/property/non-primary-residence-surcharge.page. 

² 19 RCNY §62-06(a)(2).