Three New York City homeowners have filed a lawsuit challenging the city's new tax on luxury second homes, alleging that Mayor Zohran Mamdani's administration mishandled its rollout. The suit, filed in Staten Island Supreme Court, contends that the city's Department of Finance is unfairly requiring residents to prove they are full-time New Yorkers to be exempt from the "pied-à-terre tax."
According to the court filing, the Department of Finance "has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge." The plaintiffs argue that the city failed to diligently assess which properties are subject to the tax before issuing notices and publishing a tax roll.
The lawsuit specifically targets the city's decision to publish a list of nearly one million properties that might be subject to the surcharge and the mailing of 17,000 notices to homeowners warning them of potential significant tax bills if they do not file for an exemption. The plaintiffs are demanding that a judge declare the city's actions illegal, remove the 900,000-name list from the Department of Finance website, and void the mailed notices. They are also seeking an emergency injunction to relieve homeowners of the obligation to respond to these notices.
The pied-à-terre tax, initiated earlier this year by Mayor Mamdani's administration, targets non-primary residences valued at over $5 million. The suit does not challenge the legality of the tax itself but focuses on the execution of its implementation.
Last weekend, the Mamdani administration extended the deadline for filing exemptions to September 18, moving it from the end of August. The homeowners are represented by attorney Randy Mastro, who previously served as first deputy mayor under Mayor Eric Adams.