The Mamdani administration has again extended the deadline to seek an exemption from the city’s new pied-à-terre tax, moving it from Tuesday to Oct. 17 as officials released data showing more than half the exemption requests sought by property owners so far have been granted.
As of Tuesday around 9,300 applications had been received by the city Department of Finance, of which more than 5,200 properties have been deemed primary residences by the agency and therefore exempt from the tax. That’s a success rate of 55%.
An analysis by The City Reporter found that more than 6,400 of the 17,000 properties the city initially tagged as likely subject to the surcharge — nearly 40% — have since been found to be primary residences exempt from the tax. A property is exempt when the owner can demonstrate that it’s their own primary residence or that of a full-time tenant or a close relative.
Jae Ko, a spokesperson for the finance department, said the city decided to extend the filing deadline in response to a lawsuit filed by attorney Randy Mastro, a former top city official, that persuaded a judge to order a halt to the rollout of the new tax.
That lawsuit and two others pending in a Long Island court contesting the constitutionality of the surcharge on luxury second homes have “created a lot of unnecessary confusion,” Ko said, and the extension will ensure “that New Yorkers have the time and information they need to apply.”
“While this legal process moves forward, we will continue administering the surcharge fairly, efficiently and in full compliance with the law, as we have done from day one,” he added.
This greatly diminished pool of eligible properties raises questions about Mayor Zohran Mamdani’s repeated claim that the second home surcharge will raise $500 million to help close the city’s projected $5 billion budget gap.
The Department of Finance is still processing exemption applications from another 4,000 owners. With the new extension, the final tally won’t be known for another week.
The tax, approved by the state legislature and signed by Gov. Kathy Hochul in May, targets one-, two- and three-family homes with what the Department of Finance determines have a “market value” of at least $5 million or condos and coops with a “market value” of $1 million or more that are not the owners’ primary residence. At the time, Hochul estimated the tax would raise $500 million from 13,000 homes (she didn’t factor in co-ops and condos).
City Comptroller Mark Levine then did his own analysis and found the city could raise $500 million from 11,200 properties. But he acknowledged that number would drop to between $340 million and $380 million once exemptions were factored in. On Tuesday a spokesperson for Levine said he has no new revenue estimates.
Lawsuits Target New Tax
The administration’s effort to implement the tax has been roundly criticized as haphazard, and a lawsuit filed by Mastro — who served as first deputy mayor under both Eric Adams and Rudy Giuliani — convinced a state judge on Staten Island last week to order a re-do of the entire process.
The city immediately appealed, and on Monday asked the state appellate division to pause Justice Wayne Ozzi’s order and let the Department of Finance continue to address exemption requests that are still in the pipeline.
On Monday, Mastro and a lawyer for the city met outside the public’s view in the chambers of Associate Justice William Ford of the state Appellate Division, where Mastro argued the entire process for implementing and ultimately collecting the tax should be put on hold while the city’s appeal is considered. In court papers, Stephanie Teplin, a senior counsel at the city law department, asserted this would create “chaos.”
Ford rejected Mastro’s position and let the Mamdani administration continue collecting the pied-à-terre tax. The first bills are set to go out Nov. 15 and are due Jan. 1, 2027.
Lurking in the background are two pending lawsuits — one filed by casino mogul Steve Wynn and former Trump Commerce Secretary Wilbur Ross and another by Mastro on behalf of more modest property owners — arguing that the tax itself discriminates against out-of-state property owners.
Those lawsuits remain ongoing.
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