A group of New York homeowners, including out-of-state residents, have filed a lawsuit challenging the constitutionality of the state's new pied-à-terre tax on luxury second homes. The suit, filed on September 29, alleges that the tax, enacted earlier this year, discriminates against non-residents, imposes unfair burdens, and applies retroactively, violating both federal and state constitutions.
Among the plaintiffs is a Miami-based couple, Scott Golden and Stephanie Cohen, who were charged an additional $48,949 after selling their Upper West Side condo in July. This amount was approximately 25 times their regular property tax bill. Golden expressed that the tax is "blatantly unfair" and discriminatory against those who do not reside in New York. He stated that if they had known about the tax, they would have sold their property earlier.
The couple sold their Riverside Boulevard property for $6.55 million. The lawsuit contends that the tax was enacted retroactively to January 5, nearly five months before its official passage on May 28 by the state legislature and Governor Kathy Hochul, at the request of Mayor Zohran Mamdani. The tax was initially promoted as a measure to target billionaires and raise $500 million for the city budget.
Another plaintiff, New York civic figure Kent Barwick, and his wife June, are facing a pied-à-terre tax bill of $83,603 for their Mott Street co-op in Little Italy. This is in addition to their standard property taxes of $24,984, bringing their total to $108,587. Barwick, 85, who previously led the city’s Landmarks Preservation Commission and the Municipal Arts Society, described the bill as four times higher than what they were paying, forcing them to consider selling their apartment if they cannot afford the additional cost.
The lawsuit claims the tax unlawfully discriminates against nonresidents and imposes undue burdens on homeowners and cooperative buildings. The plaintiffs are required to pay the new tax by January.
Mayor Mamdani has stated his intention to proceed with the tax rollout despite a previous court ruling that ordered the city to re-evaluate the process. The city has chosen to appeal that decision.
Jim Whelan, president of the Real Estate Board of New York, which is funding the lawsuit, argued that the tax is not affecting the wealthy out-of-state billionaires as intended but is instead harming New Yorkers. He called the tax "misguided, unconstitutional, and unfair."
A spokesperson for Governor Hochul, Kassie White, stated that while the lawsuit administration is a city and court matter, the governor believes those who can afford multimillion-dollar second homes in New York City should contribute their fair share. The Mayor’s Office did not respond to requests for comment.