NEW YORK CITY (PIX11) – Supporters and opponents of Mayor Zohran Mamdani’s pied-à-terre tax raised the same concern at a council oversight hearing: Will there be collateral damage?

The tax, solidified into state law by Gov. Kathy Hochul, was billed as a promise that wealthy homeowners will pay their fair share. It’s meant to target second homes valued over $5 million.

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At a public hearing on Tuesday, speakers raised concerns about unintended consequences for condos, co-ops and retired homeowners whose property values have skyrocketed. 

Kyle Bragg, former president of 32BJ SEIU, offered an example: a friend who purchased a brownstone 40 years ago that is likely now worth $5 million. He’s kept his brownstone to stay near family in New York but retired outside the state. 

“I want to be clear that any legislation that’s proposed to hold the wealthy accountable to their fair share is a good thing,” said Bragg. “It’s the unknown factor and the unknown … consequences to the pied-à-terre that is troubling to everyone. It’s not only the billionaires who are concerned.”

Rebecca Poole, executive director of The Council of New York Cooperatives & Condominiums, raised a similar example about New Yorkers who may have bought their properties in the 1970s, lived in the city for decades, and now are facing an unexpectedly huge tax bill. 

Another wrinkle comes in the form of co-ops, which pay property taxes collectively, Poole said. She worried that co-ops could be on the hook for the surcharge that exceeds their existing annual property tax. 

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“CNYC does not oppose a surcharge on luxury second homes,” Poole said. “[But] co-ops and condos … are not set up to collect these substantial sums such as a [pied-à-terre] surcharge from individual shareholders, and the requirement that the co-op take on this responsibility could be devastating, particularly to a small co-op.”

Poole also challenged the valuation of $1 million co-ops and condos, options for proof of residency, and who qualifies as immediate family living as a primary resident. 

The mayor did not send any administration representatives to testify due to ongoing litigation on the pied-à-terre tax rollout. In a statement sent ahead of time, Finance Commissioner Richard Lee expressed continued confidence in the administration’s ability to roll out the tax, while acknowledging any new tax will spark concerns. 

“I understand there are concerns regarding this surcharge. I also understand that there are individuals who received an initial determination letter who may not ultimately owe the surcharge. That is exactly why DOF has expanded its customer service and extended the deadline for property owners to challenge initial determinations,” he said. “DOF is committed to ensuring that this surcharge is only applied to those properties that are subject.”

The administration is still tied up in court over the tax’s rollout with the next appearance scheduled in late August.

Emily Rahhal is a digital reporter who has covered New York City since 2023 after reporting in Los Angeles for years. She joined PIX11 in 2024. See more of her work here and follow her on Twitter here.

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