{"id":319882,"date":"2026-08-12T22:50:08","date_gmt":"2026-08-12T22:50:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/319882\/"},"modified":"2026-08-12T22:50:08","modified_gmt":"2026-08-12T22:50:08","slug":"legal-scholars-and-tax-experts-question-effectiveness-strength-of-suit-against-nyc-pied-a-terre-tax","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/319882\/","title":{"rendered":"Legal scholars and tax experts question effectiveness, strength of suit against NYC pied-\u00e0-terre tax"},"content":{"rendered":"

Earlier this week, a Staten Island judge temporarily paused the city\u2019s rollout of its surcharge on second homes in the five boroughs in response to a suit brought last Friday by homeowners, which argued the way City Hall rolled out the tax created \u201cmass confusion.\u201d Therefore, the suit said, the 17,000 property owners who received mailed notices telling them they may owe the new tax should have more time to challenge whether they are responsible for paying it, and the city should not be allowed to keep a list of 900,000 properties and their owners up on its sites.\u00a0<\/p>\n

State Supreme Court Judge Wayne Ozzi \u2014 whose own home appears<\/a> on that 900,000-property list \u2014 agreed with those bringing the suit that the city\u2019s strategy of asking those property owners to prove they didn\u2019t owe the tax or were eligible for an exemption placed an unfair burden on them, and that the city didn\u2019t have permission to publish that list of 900,000 property owners on its site and social media. The city immediately appealed, which essentially reversed Ozzi\u2019s pause.<\/p>\n

New York Law School professor Stephen Louis said he thinks it is likely for things to remain that way. He said both of the plaintiff\u2019s arguments \u2013 that the city placed an undue burden on property owners by asking them to tell the government if they\u2019d mistakenly gotten a tax notice in the mail and that it wasn\u2019t allowed to publish that list of property owners \u2014 are \u201cfairly weak.\u201d<\/p>\n

\u201cThis is a new program,\u201d Louis said. \u201cThe city has to have some discretion in figuring out how best to roll it out. There\u2019s obviously a lot of elements that require the city to gather information about value, about residency, all those things. The city isn\u2019t necessarily required to do it in the very best possible way it possibly could be done. It just has to be done in a way that doesn\u2019t discriminate and isn\u2019t irrational.\u201d<\/p>\n

The rollout may not have been \u201cmagnificent,\u201d Louis said, but for any of its imperfections, it wasn\u2019t illegal. One could argue, he said, that maybe the 17,000 letters sent to people the city thought could possibly be required to pay the tax could have been \u201cbetter drafted and done differently,\u201d but that it was also in the city\u2019s best interest to cast a wide net and ensure people understood the importance of paying the tax if they had a second home.<\/p>\n

\u201cThere\u2019s nothing unlawful, in my opinion, with the fact that they sent it out,\u201d Louis said. \u201cAnd, when there were certain issues, they adjusted the time frame.\u201d<\/p>\n

Those who originally received a letter had until Aug. 21 to tell the city whether they thought it had made a mistake in mailing them a tax notice. Now, people have until Sept. 18 to do so. <\/p>\n

The surcharge itself 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 the city at $5 million or more, with rates ranging from 0.8% to 1.3% and condo and co-op units valued at $1 million or more may face rates of 4% to 6.5%.\u00a0<\/p>\n

Louis also emphasized that the list of 900,000 properties the city published was essentially a duplicate of a tax list the city publishes every year anyway and doesn\u2019t include any \u201csecret\u201d information. He added that he wasn\u2019t sure what purpose Ozzi issuing a temporary order blocking the tax rollout was, when the letters had already been mailed and the online list had already been published.\u00a0<\/p>\n

Crucially, the suit only challenges the rollout, not the legality of the tax itself \u2013 but Louis said he didn\u2019t think a suit challenging the tax\u2019s legality would work out well, either.\u00a0<\/p>\n

Did NYC cross the line on pied-a-terre list?<\/p>\n

Lloyd Reisman, a partner at real estate firm BBG, however, said he wasn\u2019t so sure the city hadn\u2019t crossed a line by mailing out the notice to so many people.\u00a0<\/p>\n

\u201cThe focus of the challenge is an argument that the city had an obligation to make an internal determination using available information that would have presumably shortened the list of individuals and\/or apartments who were subject to the surcharge from the outset, which would have alleviated the burden of \u2026 several thousands of apartments receiving these notices,\u201d Reisman said. \u201cI think there\u2019s a compelling argument there that the city may not have met its burden in rendering that initial determination.\u201d<\/p>\n

If a judge ultimately agrees with that argument, Reisman said the city might have to void the notices it sent out, redetermine who should get them and reissue the mailings.\u00a0<\/p>\n

However, Reisman also said he agreed that the city had an interest in casting a wide net regarding who might have to pay the tax and expected the city\u2019s tax rollout to continue as planned.\u00a0<\/p>\n

\u201cThe pied-\u00e0-terre tax is going to move forward one way or the other,\u201d Reisman said. \u201cIf the list [of who pays] gets shorter, okay, the list gets shorter. But, there\u2019s still going to be people on it.\u201d<\/p>\n

Property tax expert\u00a0Benjamin Williams<\/a> said that while it was not surprising that the way the tax was rolled out prompted a legal challenge, it was likely to continue moving forward without much delay.<\/p>\n

\u00a0\u201cThis case is more likely to affect the timing of the tax than its long-term future,\u201d said Williams, a member of Rosenberg & Esits, P.C. \u201cIf the City prevails, it will essentially be business as usual, and implementation will continue. If the plaintiffs prevail, the City may have to pause, address the procedural deficiencies identified by the court, and reset the process, but the tax itself is unlikely to disappear.\u201d<\/p>\n

He added that property owners who received that July letter should \u201ckeep their paperwork moving\u201d and that any courtroom delay should \u201cnot be mistaken for a tax holiday.<\/p>\n

Emily Eisner, a chief economist at nonpartisan think tank Fiscal Policy Institute, said that she believed the city wouldn\u2019t have implemented a tax rollout that wasn\u2019t legally sound, and that, if the suit did delay the city\u2019s collection of the tax at all, it would be a minor one, and wouldn\u2019t greatly impact the city\u2019s budget.\u00a0<\/p>\n

\u201cThe maximum amount that I expect to be collected by this tax is $500 to $700 million a year. That is a very small amount relative to the size of the city budget,\u201d Eisner said. \u201cThe precise timeline of when they\u2019ll be able to collect that amount of money will not create a big problem. I think it\u2019s unfortunate that there might be a delay, but I honestly don\u2019t anticipate there to be a major delay.\u201d<\/p>\n

Eisner also added that the suggestion wealthy people would leave the city due to the tax was inaccurate, according to her think tank\u2019s research on property taxes.\u00a0<\/p>\n

\u201cOverall, we find that there\u2019s very little migration out of the city and the state in response to the tax increases,\u201d Eisner said. \u201cWealthy, high-income people want to make a big show of how burdensome taxes are because it very effectively makes the case for taxes to be decreased on them.\u201d<\/p>\n

Both parties will be in court Aug. 31 to argue over whether the city\u2019s allowed to continue rolling out the tax as planned.<\/p>\n","protected":false},"excerpt":{"rendered":"Earlier this week, a Staten Island judge temporarily paused the city\u2019s rollout of its surcharge on second homes…\n","protected":false},"author":2,"featured_media":270718,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[2710,75,84,83,9,24,63,79763,87,134,11467,82],"class_list":["post-319882","post","type-post","status-publish","format-standard","has-post-thumbnail","category-manhattan","tag-law","tag-manhattan","tag-manhattan-headlines","tag-manhattan-news","tag-new-york","tag-new-york-city","tag-nyc","tag-pied-a-terre","tag-politics","tag-staten-island","tag-tax","tag-zohran-mamdani"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/319882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=319882"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/319882\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/270718"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=319882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=319882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=319882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}