NYC homeowners sue the city for ‘mass confusion’ over pied-à-terre tax
Billionaires’ Row from Harlem. Photo by joiseyshowaa on Wikimedia
A handful of property owners have begun a legal challenge against New York City over Mayor Zohran Mamdani’s rollout of the new pied-à-terre tax, claiming the “chaotic” rollout of the measure caused mass confusion, as Gothamist reported. The surcharge, aimed at people who own second homes valued at over $5 million for one-to-three family homes and over $1 million for condos or co-ops, began with the publication of a Department of Finance (DOF) database of 900,000 properties, many of which were not actually subject to the tax. The complaint alleges that the city violated state law by subsequently sending 17,000 letters to homeowners alerting them that they may be subject to the high-value property tax.
Homeowners Rachel O’Brien, Carmine Morano and Simon Hedley filed the complaint Friday in Staten Island state Supreme Court, claiming that, “Thousands of people who owe nothing have been confused, exposed, and put to real expense so this administration could make a political point,” according to Randy Mastro, the homeowners’ lawyer, who was first deputy mayor under previous Mayor Eric Adams.
The complaint names the city, Mayor Zohran Mamdani, the Department of Finance and agency Commissioner Richard Lee as defendants.
Hedley, a Manhattan homeowner who received a letter identifying him as subject to the tax, claims that: “As a full-time New York City resident and homeowner, receiving a threatening letter warning of a potentially massive pied-à-terre surcharge bill was deeply unsettling. The city has endless ways to verify residency; resorting to a scattergun approach and demanding that residents prove their status is disturbing, and not a very friendly act toward someone who lives in New York City.”
In defense of the process, Mamdani said the database released the city’s property tax roll as a state law requirement. The DOF eventually changed its website, adding “The vast majority of properties and units listed in the roll will NOT be subject to the surcharge.”
The city also extended the deadline for recipients of the letters from the original date of Aug. 21 to Sept. 18.
As 6sqft previously reported, the initial extension offered time for homeowners to ask questions and submit the required documentation. At a press conference announcing that extension, Mamdani addressed the confusion between the property tax lists and the letters New Yorkers have been receiving, saying that 17,000 homeowners had already received the notices, stating that “There has been both a willful and an unintentional conflation of both the property tax roll and these letters.”
The lawsuit, which does not dispute the merits of the tax, seeks to further extend the deadline, giving homeowners time to prove their homes are primary residences. The homeowners are also asking the court to make the city take down the database, though it is publicly available elsewhere.
State lawmakers included the second-home tax as part of the $268.5 billion 2027 budget approved in May. For the first two years, co-ops and condos valued at $1 million or above and one- to three-family homes valued at $5 million or above by the city’s Department of Finance will face the tax. In 2028, the city will evaluate properties by looking at comparable sales and then update the tax.
A chart from DOF details the surcharge rate for tax years 2026-2027 and 2027-2028:
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