Roughly 2,000 applications for an exemption from New York City’s new second-home tax have been completed by applicants, according to the city’s Department of Finance.
Another 4,800 applications have been started but not submitted, the agency said. Together, the number of applications started or submitted is equivalent to about 40% of the approximately 17,000 notices sent to property owners warning that they may be subject to the surcharge.
The approximately 2,000 figure represents applications completed by applicants, not exemptions granted, DOF stressed. The agency said it is reviewing applications on a rolling basis and will notify applicants once it has made a determination.
How many of the initially identified properties are ultimately exempted could help determine whether the surcharge produces the $500 million in annual revenue budgeted by Mayor Zohran Mamdani’s administration.
In a June analysis conducted after the final legislation was enacted, Comptroller Mark Levine’s office calculated a notional surcharge of approximately $1.008 billion across 13,586 properties and units before the full extent of primary-residence exemptions and appeals was known.
Two- and three-family homes accounted for $141 million of that notional total. The comptroller’s office said collections from those properties were likely to fall substantially because an entire two- or three-family property is exempt if at least one unit serves as a qualifying primary residence.
Even after removing two- and three-family homes from the calculation, the office said primary-residence exemptions, appeals and changes in owner behavior could reduce the remaining notional revenue by about 40% before placing the city’s $500 million forecast at risk.
Mamdani nevertheless said Monday that he remained confident the surcharge would produce the anticipated revenue needed to plug the city budget deficit.
“Look, I continue to believe that the pied-à-terre surcharge will raise $500 million on an annual basis,” Mamdani said during a press conference in Hunts Point.
His comments came after the administration extended the exemption-application deadline over the weekend to Sept. 18, nearly a month beyond the original deadlines, amid confusion over who may be subject to the tax and complaints from some longtime residents who received notices despite saying the properties were their primary homes.
The administration also announced expanded outreach to co-op and condominium boards, property managers, senior centers, elected officials and property owners who received notices.
Mamdani defended the rollout Monday when he was twice asked whether he regretted how the city had introduced the surcharge. He acknowledged property owners’ concerns but did not express regret, arguing that the city sent the notices months before the tax would be imposed so recipients could correct inaccurate information or establish that they qualify for an exemption.
“I think first and foremost that I understand the concerns New Yorkers have, especially when it comes to a new tax,” Mamdani said. “And as we know, that new taxes typically present more questions than they do answers.”
Mamdani also sought to distinguish the approximately 17,000 warning letters from the supplemental property assessment rolls published online, which contain more than 900,000 residential property and co-op unit records.
The broader rolls were not a list of properties the city had determined were second homes, he said. The letters were sent to the smaller group that DOF identified as potentially subject to the surcharge.
Mamdani said the approximately 17,000 properties represent the maximum number that could be subject to the surcharge.
The final number could decline as the city determines whether properties held through trusts or limited liability companies are nevertheless used as qualifying primary residences.
“The assessment of 17,000 properties potentially being levied with this surcharge, that is the maximum number of properties,” Mamdani said.
The mayor said the city wanted owners to have an opportunity to engage with officials before any charge was imposed.
“The thing we did not want to do was levy this charge without giving New Yorkers a period of time where they could engage with the city,” Mamdani said. “And now that’s this period of engagement.”
The rollout was already under scrutiny last week, when DOF Commissioner Richard Lee acknowledged that some of the records used to identify possible taxpayers may be outdated.
Lee also said the department was still working through how the surcharge would be administered in co-op buildings, where property taxes are generally billed collectively to the cooperative corporation rather than directly to individual shareholders.
The surcharge applies to certain high-value New York City properties that are not used as qualifying primary residences.
For one-, two- and three-family homes, the surcharge applies to properties valued by DOF at $5 million or more, with rates ranging from 0.8% to 1.3%. During the program’s first two years, condo and co-op units valued at $1 million or more may face rates of 4% to 6.5%.
A property may be exempt if it is the primary residence of its owner, certain immediate family members, the sole beneficiary of a trust or people who collectively hold a majority stake in the entity that owns it. Units rented or sublet under an arm’s-length lease of at least one year may also qualify.
Property owners who received notices have until Sept. 18 to apply for an exemption through DOF. They can also appeal the agency’s market-value or primary-residence determination to the city Tax Commission.
Any surcharge imposed is expected to appear on property tax bills due Jan. 1, 2027.