The City Council plans to hold an oversight hearing on the Mamdani administration’s rocky rollout of a new tax on luxury second homes, as thousands of homeowners seek exemptions from the impending charges aimed at boosting the city’s budget.
“Have you recently received a letter about the new pied-à-terre tax?” says a Council flyer advertising the Aug. 18 joint hearing by the Finance and Governmental Operations committees, featuring a QR code to sign up to testify. “The Council wants to hear from you.” The City Reporter reviewed a copy of the flyer emailed out Friday morning by the office of Councilmember Kamillah Hanks, the majority whip who represents Staten Island’s North Shore.
The planned hearing comes as the city’s Finance Department is determining who exactly will owe the tax enacted with Mayor Zohran Mamdani and Gov. Kathy Hochul’s backing in the current state budget. It also comes as several thousand homeowners out of roughly 17,000 who were sent city letters about potentially being subject to the tax have submitted or started exemption applications.
Councilmember Gale Brewer, who chairs the Governmental Operations Committee and represents the Upper West Side, said she’s hoping to hear from city finance officials about what data they used to identify those 17,000 properties. She noted her office has received a few dozen complaints from people who said they primarily live in the city but got one of the letters.
“I send them to the Department of Finance” for help claiming an exemption, Brewer said. “Many of them are older and they can’t fill out the form. … People think they have to call their attorney.”
The mayor and governor have estimated the tax will generate about $500 million a year in new revenue for the city, though a city comptroller estimate from before the tax was finalized in May found the amount could be closer to $360 million a year.
Residency Fraud?
Meanwhile, Hochul’s office said this week that it’s monitoring for any possible residence fraud exposed through the exemption process, as some number of alleged free riders claim primary residence outside of New York City to dodge higher local income taxes and auto insurance rates, even as they actually mostly live in the city.
Some New Yorkers told The City Reporter and other news outlets last week that they received the letters from the Finance Department even though their New York City homes are their primary residences. The Mamdani administration then extended the deadline for people to apply for exemptions from later this month to Sept. 18.
Owners determined to owe the tax could be on the hook for tens of thousands of dollars annually on their properties, with the first payments due in January. The tax initially covers one-, two- and three- family homes assessed by the city to be worth at least $5 million, and co-op and condo units assessed to be worth at least $1 million. Exemptions are allowed for non-owner-occupied homes occupied by a tenant, someone who collectively holds a majority interest in a corporate entity that owns a property, an owner’s immediate family member or a trust beneficiary.
City Hall didn’t comment Friday about the hearing, which is scheduled for 1 p.m. on Aug. 18. A Mamdani spokesperson said in a statement Thursday that the administration is “committed to ensuring that every New Yorker who owes the pied-à-terre tax pays it — and helping those who don’t file for an exemption.”
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