NYC Sees Over Half of Pied-à-Terre Tax Appeals Approved, Impacting Revenue Projections

More than half of the homeowners who appealed New York City's new pied-à-terre tax have won their cases, which may impact the expected revenue from the tax. Mayor Zohran Mamdani and Governor Kathy Hochul announced the tax on luxury second homes, which targets co-ops valued over $1 million and houses valued over $5 million, with an anticipated revenue of over $500 million. As of Friday morning, the city Department of Finance reported that 10,000 exemption applications had been submitted, with approximately 5,700 approved. The number of lawsuits and exemption requests continues to grow. Plaintiff lawyer Ben Williams of Rosenberg & Ellis questioned the realism of the city's $500 million revenue estimate, suggesting that once primary residences are excluded and market values are contested, the collectible amount may be significantly lower. The appeals deadline has been extended to October 13 from October 6, following a lawsuit by former first deputy mayor Randy Mastro, which led to a ruling by State Supreme Court Justice Wayne Ozzi that the city must redo its tax plan rollout. The city had initially notified 17,000 homeowners about the tax, but this number has since been revised to between 10,000 and 13,000. City Hall has appealed Ozzi's decision and received a stay, allowing tax collection to proceed during the appeals process. Real estate lawyer Joshua Wurtzel noted that if the court's decision is upheld, it could jeopardize the tax's implementation. Additionally, two other lawsuits challenging the tax's fairness towards out-of-state owners are ongoing in Long Island court. Despite the ongoing legal challenges, a representative from the Finance Department reiterated confidence in the revenue projections and emphasized the tax's purpose in supporting public services. The representative also stated that the administration is committed to providing necessary information for exemption applications and will continue to administer the surcharge in compliance with the law.