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Judge pauses NYC pied a terre tax enforcement, ultra luxury rentals rise
The temporary restraining order blocks further enforcement on tax notices sent to about 17,000 homeowners, and the pause adds uncertainty that brokers say is moving more high-end units into rentals.
A Staten Island judge has issued a temporary restraining order pausing New York City enforcement tied to its proposed pied a terre tax rollout, a development that HousingWire says is reshaping the ultra-luxury rental market. The judge, Wayne Ozzi, sided with homeowners who sued the city. The legal challenge targets the rollout, which homeowners argued cast too wide a net by requiring residents to prove New York City residency, rather than contesting the tax concept itself. Under the order, the city cannot take further enforcement action on tax notices sent to roughly 17,000 homeowners. The next hearing is scheduled for Aug. 31, according to HousingWire. HousingWire also reports that brokers and owners say the policy uncertainty has increased listings for high-end rentals, including units priced above $100,000 a month. The outlet cites a case in which a downtown client shifted from selling to renting after the tax was proposed, listing the unit at $40,000 a month, and notes that owners may need to rent to tenants who make New York City their primary residence under a bona fide, arm’s-length lease of at least one year to avoid the tax.