New York City is facing a lawsuit from a group of homeowners seeking to delay the rollout of Mayor Zohran Mamdani’s new pied-à-terre tax, arguing that the city’s publication of a list of potentially affected properties has created “mass confusion” and subjected homeowners to unwarranted scrutiny of their personal information.
According to Bloomberg, the lawsuit was filed Friday in New York state court in Staten Island on behalf of three homeowners. The legal challenge does not seek to overturn the tax itself. Instead, it targets the city’s assessment roll and notices sent to property owners who may be liable for the surcharge.
The homeowners argue that the city has improperly shifted the burden onto residents to prove that they are not subject to the tax, rather than first determining which properties actually qualify.
“The city has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the surcharge,” the homeowners said in their complaint, according to Bloomberg.
The lawsuit was filed by prominent litigator Randy Mastro, who previously served as a deputy mayor under former Mayor Rudolph Giuliani.
Homeowners seek to halt September deadline
The plaintiffs are asking the court to declare that homeowners should not be required to respond to the city’s notices by the September 18 deadline.
Second lawsuit targeting Mamdani policy
The case marks the second recent lawsuit filed by Mastro against a major policy associated with Mamdani, Bloomberg reported.
Last month, Mastro filed a separate lawsuit on behalf of New York City landlords seeking to invalidate a rent freeze approved in June.
That complaint accused Mamdani of improperly influencing the Rent Guidelines Board and disregarding evidence presented by property owners about increasing operating costs.
The latest lawsuit does not challenge the legality of the pied-à-terre tax itself, but instead focuses on how the city has identified and notified potentially affected homeowners.
Nearly 1 million properties listed
The city’s Department of Finance published an assessment roll online last month that “includes, but is not limited to, those properties that may be subject to the surcharge.” The list contained estimated market values for nearly 1 million residential properties, including hundreds of thousands that appeared to fall below the threshold for the new levy.
The publication quickly drew criticism from homeowners who said their primary residences had been included on the list. Some City Council members also said they were caught off guard by the release.
City extends exemption deadline
In response to the backlash, New York City has extended the deadline for homeowners seeking exemptions by four weeks to September 18.
According to a statement from Mayor Mamdani’s office, the city will also expand efforts to provide information to owners of more than 31,000 properties that may potentially be subject to the tax.
The final list of properties subject to the levy is scheduled to be published on December 31. The provisional list, however, was far larger than the city’s initial estimate that only 10,000 to 13,000 properties would ultimately be liable.
“Anyone who received a letter and believes they may qualify for an exemption should take advantage of this additional time,” Department of Finance Commissioner Richard Lee said in the statement.
The Department of Finance said earlier this week that about 2,000 homeowners had already submitted applications seeking an exemption.
More than 17,000 homeowners received notices
The city also mailed approximately 17,000 notices to property owners informing them that they may be liable for the new tax.
The notices were drawn from a provisional assessment roll containing more than 900,000 properties—a figure dramatically higher than the number of homes officials expect will actually be subject to the levy.
The size of the list has become a major source of controversy surrounding the tax’s rollout. Homeowners have complained that inclusion on the list could create confusion over their tax status, while critics have also raised concerns about the public disclosure of property information.
What is Mamdani’s pied-à-terre tax?
The levy was signed into law in May by New York Governor Kathy Hochul. It targets single-family homes valued at $5 million or more and apartments valued at $1 million or more that meet the criteria for the second-home surcharge.
The tax is expected to generate roughly $500 million annually, providing additional revenue for Mamdani’s administration as it attempts to address the city’s multibillion-dollar budget deficit.
