Under New York’s new pied-à-terre tax, homeowners are guilty until proven innocent.

Karen Young spent three hours just trying to begin the process of proving her Upper West Side brownstone — her home of 30 years — is her primary residence to avoid the new pied-à-terre surcharge.

In the end, it was a complete waste of time.

“I was planning to upload a few more documents yesterday morning, only to discover the documents I uploaded Monday weren’t saved despite the requirement to set up an account with a password,” Young, president and founder of beauty marketing company the Young Group, told The Post. She also needs to get ownership title/deed for her brownstone from her estate lawyer, whom she has to pay, to continue with the process.

“So I have to start from scratch,” she added. “I will wait till all the documents are assembled. There are a lot of them.”

Young has until Aug. 21 to submit all her documents or else she will be on the hook for a $42,824 surcharge courtesy of New York City’s new annual “Surcharge on Property That Does Not Serve as a Primary Residence,” and levied by the city’s Department of Finance on her Jan. 1, 2027 property tax bill.

“It’s a cumbersome process to prove that I’m a primary resident, which just seems absurd. My jury summons come here, I pay my taxes from here, my utilities,” she previously told The Post.

When homeowners get a notice in the mail claiming they owe the tax, the onus is on them to prove the city got it wrong. 

The tax — which was framed as a tax on wealthy second-home owners — has caused a whole bunch of confusion. In particular, homeowners were overwhelmed when Mayor Zohran Mamdani’s administration published a searchable database of more than 960,000 residences and owners that could fall under the new pied-à-terre tax. 

“We opposed this tax in part because we warned that determining who is and is not subject to it would be extraordinarily complicated,” said James Whelan, president of the Real Estate Board of New York. “The fact that so many owners appear to be receiving inaccurate notices raises serious questions about the City’s readiness to administer the program. Even we did not expect implementation to be this flawed.” 

Signed into law in May by Gov. Kathy Hochul, the Albany legislation targets unoccupied, secondary properties in New York City: one- to three-family homes valued at $5 million or more, and co-ops or condos worth at least $1 million. Residents who received a bill but don’t meet those criteria can appeal.

“The law was written like Swiss cheese,” high-end residential broker Donna Olshan told The Post. “It is filled with holes. From a legal drafting standpoint it is an example of incompetence.”

Below are some of the issues:

“If you are out of an apartment renovating for a year and still pay New York City taxes, will the apartment be considered a pied-à-terre?” Olshan said. That is common among large homes, she noted.

What happens while a home is in probate, which could take longer than a year, she said. How about if someone has a long stay in a nursing home or assisted living and still owns their apartment? 

They “may have to jump through additional complicated hoops, costing them” a lot of money, she said.

What happens if someone is out of their home for over a year due to a fire? “You could be subject to a pied-à-terre tax,” she said.

Olshan brought up a potential issue for homeowners who rent out their apartments.

The tenant has to make the unit a “primary residence,” which carries explicit tax consequences.

If you reject a potential out-of-state tenant because you suspect they won’t be able to substantiate primary residency, it could result in “a fair housing complaint because you’re not supposed to ask people if they pay New York City taxes,” she said. Or if the person is a foreign student and gets turned down, they could file a national origin complaint.

How will the city assess properties that are mixed-use? How will it handle properties that are owned by LLCs, an entity which can’t live in a property, Rosenberg & Estis’ Benjamin M. Williams said. 

And a new owner shouldn’t be penalized because the past owner used a property as a pied-à-terre, Williams said at the Department of Finance’s July 9 public hearing on the surcharge.

“Similarly, a purchaser who buys a home with a genuine intent to move in should not be taxed during a reasonable transition period caused by closing, renovation or relocation,” he said at the hearing, noting that taxpayers who are eligible for the exclusion shouldn’t have to go through the whole proof process every year.

For Holland & Knight’s Stuart M. Saft, the biggest flaw is “its Phase 2 valuation system starting in July 2028, which improperly calculates co-op and condo taxes based on outdated building share percentages rather than true unit-by-unit market values. This creates an inaccurate, unfair formula that sets a dangerous precedent for future property taxation,” he wrote. 

Phase 1, from July 1 to June 30, 2028, uses values based on current DOF market value and phase 2, from July 1, 2028 to June 30, 2031, applies values based on comparable sales.

Another issue with the law is that homeowners who have more than one home, but live in the city, get dinged on the ones that are not their primary residences. 

“This means that the rationale for the PAT Tax that it is directed to the wealthy who do not pay local taxes is not true,” he said.