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More than half of the thousands of homeowners who have already appealed the city’s new pied-à-terre tax have won their cases, threatening the levy’s much ballyhooed revenue potential.
When Big Apple Mayor Zohran Mamdani and New York Gov. Kathy Hochul announced the controversial tax on luxury second homes — or co-ops worth more than $1 million and houses over $5 million — in the city, they claimed the policy would generate $500 million-plus in revenue.
But the city Department of Finance told The Post that as of Friday morning, exemption applications had hit 10,000, with a whopping 5,700 approved — and the lawsuits and exemption requests are still coming in fast and furiously.
“I think the bigger fiscal question is whether the city’s $500 million revenue estimate was realistic in the first place,” said plaintiff lawyer Ben Williams of Rosenberg & Ellis.
“Once primary residences are removed and overstated market values are challenged, we may find that the amount actually collectible is significantly less than projected,” he said.
The appeals deadline – which has now been moved three times – was pushed again to October 13 from Oct 6. after a lawsuit filed by a former first deputy mayor to Eric Adams, lawyer Randy Mastro, on Staten Island.
State supreme-court Justice Wayne Ozzi ruled in Masto’s favor a little over a week ago, saying the city needs to redo its roll-out of the tax plan from scratch.
The ruling said the city prematurely blasted out letters to 17,000 homeowners it said could be affected by the tax. That 17,000 figure has dropped to more like 10,000 to 13,000 affected homeowners, the city said.
Either way, City Hall immediately appealed Ozzi’s decision and won a stay on the order, allowing the Mamdani administration to forge ahead with its tax collection while the suit goes through the appeals process.
Joshua Wurtzel, a real-estate lawyer and partner at Schlam Stone & Dolan LLP, said the lawsuit – if successful – could cause the entire operation to crash and burn.
“If the court’s decision ends up being upheld on appeal, which I think there’s probably at least a decent chance [of] that, then all of this kind of goes out the window,” Wurtzel said.
In addition to the suit held up in appeals courts, two other lawsuits claiming the tax unfairly targets out-of-state owners are being argued in Long Island court and remain ongoing.
Despite the controversy and speculation surrounding the tax, a rep for the Finance Department has repeated a comment Mamadani made in August standing by the complicated levy’s revenue projection.
“We continue to be confident in that assessment of what the annual revenue will look like,” the representative told reporters at an unrelated press conference in August.
Another rep for Finance told the Post the pied-a–terre surcharge simply asks luxury-second-home owners to “contribute their fair share toward schools, safer streets, and the services New Yorkers rely on. “
“These meritless lawsuits have created a lot of unnecessary confusion,” the representative said. “Nevertheless, the Administration remains fully committed to ensuring that New Yorkers have the time and information they need to apply, so we are extending the deadline for exemption applications to October 13.
“While this legal process moves forward, we will continue administering the surcharge fairly, efficiently and in full compliance with the law, as we have done from day one,” the rep said.