A number of homeowners are suing NYC over the Mamdani administration’s rollout of the pied-à-terre tax on expensive second homes, arguing the city “has arbitrarily and capriciously foisted” on city dwellers the responsibility of proving they’re full-time residents who shouldn’t be hit with the surcharge.
The lawsuit, filed Friday in state court on Staten Island, is seeking a delay in the effective date for imposing the second-home tax on 1,2 and 3-family homes assessed at $5 million or more and co-ops and condos with a recorded value of $1 million or more.
The rollout of the tax, passed by the state but administered by the city, has been a source of intense controversy and backlash from homeowners across New York.
The lawsuit takes issue with the city’s publishing of a property tax roll with nearly 1 million properties — some of which, the Department of Finance noted, could be subject to the tax. After that master list was published, around 17,000 homeowners received letters warning them that the city had identified them as subject to the tax and needed to contest the finding or get hit with the surcharge.
A number of property owners complained, however, they were full-time city residents and should not have been flagged for the new tax.
The plaintiffs are asking a judge to nullify the letters, as well as to force the city to take down the list of almost 1 million properties, though the information is already in the public record.
The lawsuit claims the city’s publication of the list has created “mass confusion” as well as “invited public scrutiny and ridicule” of the wealthy homeowners.
The suit, which names Mayor Mamdani and his finance commissioner Richard Lee, claims that the city did not fully make use of the information available to it about homeowners in determining who would be subject to the tax. It was filed by a trio of homeowners who were on the initial list, Rachel O’Brien, Carmine Morano and Simon Hedley, who are represented by former Adams administration First Deputy Mayor Randy Mastro.
“The result is an impermissible burden shift of determining primary residence onto New York City residents with respect to a tax they don’t owe and should never have been bothered with in the first place,” Mastro wrote.
A spokesperson for the mayor, who’s been a huge proponent of increasing taxes on the city’s most wealthy, argued the surcharge will help make the city deliver better parks, streets and infrastructure.
“The Department of Finance has been working around the clock to answer questions, provide assistance and ensure those subject to the surcharge have the information they need,” spokesperson Matt Rauschenbach said in a statement. The Law Department is prepared to vigorously defend the city against this suit.”
Those with non-owner-occupied homes valued at $5 million or more and co-ops valued at $1 million or more are subject to the tax. Exemptions are available for units that are occupied by a family member or tenant of the owner.
The bills are scheduled to be issued in November, with payment deadlines in January. If they miss a September deadline — extended from August to prove where they live, homeowners have until March to appeal with the Tax Commission.
The city added 24 additional positions across different agencies to help with getting the tax going.
