New York City’s new tax on pricey second homes has hit a roadblock just as homeowners were figuring out whether they would have to pay it.
A Staten Island judge ruled Tuesday that the city mishandled the rollout of the so-called pied-à-terre tax and ordered officials to redo parts of the process. The tax itself remains in place, however, and the city has appealed the decision, according to CNN.
So, what is a pied-à-terre tax? Basically, it’s an extra tax on certain expensive homes that aren’t someone’s main residence. The new surcharge applies to second homes worth more than $5 million, as well as condos and co-ops worth $1 million or more. Primary homes and rental properties are exempt. The tax was part of Mayor Zohran Mamdani’s 2027 budget and was backed by Gov. Kathy Hochul. The goal is to bring in more money from owners of expensive second homes. But the rollout got messy.
In July, the city published a list of more than 900,000 New York City homeowners. The list was required under the new law, but it included many homes that weren’t actually subject to the tax, creating confusion. The city also sent notices to about 17,000 homeowners warning that they could owe the tax unless they proved they qualified for an exemption. Some said the city had mistakenly flagged their primary homes.
A judge has ordered a redo of New York City’s proposed pied-à-terre tax.
Beata Zawrzel/NurPhoto via Getty Images)
A group of homeowners sued, arguing that the city was making them prove they lived in their own homes. Judge Wayne M. Ozzi sided with them, ordering the city to take down the broad list and cancel the notices that had already been sent. Any new notices must be based on a more careful review of which homes actually qualify, according to the ruling.
The city isn’t giving up. Mamdani’s administration called the decision “wrong” and appealed Tuesday evening. That appeal temporarily puts the judge’s order on hold, allowing the city to continue implementing the tax while the case moves forward, according to CNN. The tax is also facing a separate legal challenge from a group that includes billionaire casino mogul Steve Wynn and former U.S. Commerce Secretary Wilbur Ross.
For now, the tax still exists. The city just has to rethink how it decides who gets the bill.
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Abby Montanez
Abigail Montanez is a staff writer at Robb Report. She has worked in both print and digital publishing for over half a decade, covering everything from real estate, entertainment, dining, travel to…