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BLOG / 08.03.26 /Kenneth R. Jacobs
New September 18th Deadline to File Challenges to Pied-A-Terre Tax
On Saturday, August 1, 2026, the Mayor’s office extended the deadline to challenge the Pied-a-Terre Tax (the “PAT Tax”) assessment on any particular property from August 21st (or 24th) to September 18, 2026. According to multiple media sources, this decision is a response to a flood of complaints about the number of buildings potentially made subject to the PAT Tax, and the poorly drafted and confusing “instructions” provided by the Department of Finance for figuring out whether an owner was even subject to the tax and how to challenge a claim.
To paraphrase Casablanca, we are shocked – shocked – to find out that the rollout is a mess.
The inquiries coming to us reflect several sources of confusion for owners:
1) Where do they find the “market value” information for their unit to verify whether they are in fact covered by the PAT Tax?
2) What information do they have to provide to show that they are primary residents?
3) What exemptions are available? (Many of them are unaware that they may be exempt if their tenant or subtenant is a primary resident.)
4) How can they persuade their tenant to provide the information needed to exempt their landlord from the PAT Tax?
5) Are there any other steps they can take to exempt themselves from the tax before the deadline?
6) Who should file a challenge on their behalf? Counsel for the building? The tax cert lawyer for the building? Their accountant? Their personal lawyer?
7) Is anyone challenging the constitutionality of the PAT Tax?
Many of these questions are being directed to management and Board members. We have prepared draft notices to our Boards clarifying the Board’s role in dealing with PAT Tax challenges and urging owners to consult their own counsel or tax advisors. Some Board members have expressed concern that even sending out that much information, though, implies that the Board has some responsibility for compliance or challenge.
Co-ops Left Hanging
Unfortunately, the City has also stuck Co-op Boards into the middle of the collection process. We are preparing a draft proprietary lease amendment giving cooperative corporations the legal authority to collect the PAT Tax as “additional maintenance charges” and protecting them against shareholders’ failures or refusals to pay the tax when due.
We are also trying to ascertain how the Co-op Board is supposed to find out how much to collect, and from whom, before tax bills come out in January 2027. As far as we can tell so far, letters from the City have been delivered only to individual shareholders, not to the Boards, management or the lender. (If anyone has received a letter in their corporate or management capacity, please let us know.) At this point we can only speculate that the City will notify Co-ops in some manner after the September 18th deadline passes.
We will keep everyone advised as the regulations evolve and more questions (and answers) arise.
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