Pied-à-terre tax: City has approved 5,700 exemption requests so far
The Department of Finance has granted more than half of the exemption applications it has received so far, which raises doubts about the projected $500 million in revenue while the court fights
The city Department of Finance has approved more than half of the exemption requests filed by New York City homeowners against the new pied-à-terre tax. That raises questions about how much the levy on luxury second homes will actually bring in. As of Friday morning, the department had received 10,000 exemption applications and approved 5,700 of them.
Who the NYC pied-à-terre tax covers
The tax applies to second homes that are co-ops worth more than $1 million or houses worth more than $5 million. When Mayor Zohran Mamdani and Gov. Kathy Hochul announced it, they projected more than $500 million in revenue. Exemption requests and lawsuits are still coming in quickly.
Ben Williams, a Rosenberg & Ellis lawyer who represents plaintiffs, said the bigger fiscal question is whether that estimate was ever realistic. He said that once primary residences come off the rolls and inflated market values are challenged, the city may collect well below the projection.
Exemption deadline and the court fight
The deadline has moved three times and now falls on Oct. 13. It was pushed back from Oct. 6 after Randy Mastro, who served as first deputy mayor under Eric Adams, sued on Staten Island. A little over a week ago, State Supreme Court Justice Wayne Ozzi ruled for Mastro. He found that the city sent letters too early to 17,000 homeowners it thought could owe the tax and ordered it to restart the rollout. The city now puts the number of affected homeowners at 10,000 to 13,000.
City Hall appealed right away and won a stay, so collection continues while the appeals courts hear the case. Real estate lawyer Joshua Wurtzel of Schlam Stone & Dolan said there is a decent chance the ruling is upheld, and if it is, “all of this kind of goes out the window.” Separately, a court on Long Island is hearing two other suits that claim the levy treats owners from outside New York unfairly. Neither case has been resolved.
The Finance Department stands by the revenue estimate, repeating a position Mamdani took in August. A spokesperson described the surcharge as a way for owners of luxury second homes to help pay for schools, public safety and the city services residents depend on. The spokesperson also called the lawsuits against the tax meritless and said they had caused needless confusion. According to the spokesperson, the administration extended the filing deadline to Oct. 13 to make sure homeowners have enough time and guidance to apply.
Quick answers
Who has to pay the NYC pied-à-terre tax?
It applies to second homes that are co-ops worth more than $1 million or houses worth more than $5 million.
What is the deadline for a pied-à-terre tax exemption?
The deadline has moved three times and now falls on Oct. 13, pushed back from Oct. 6.
Is the city still collecting the tax despite the court ruling?
Yes. The city appealed Justice Wayne Ozzi's ruling and won a stay, so collection continues while the appeal is heard.
