NEW YORK (BLOOMBERG) — New York City can proceed with the rollout of its pied-à-terre tax while an appeals court considers a legal challenge.
A Staten Island judge’s Sept. 29 ruling blocking the tax’s implementation was put on hold Monday by the Brooklyn-based appeals court, which promised to rule on the dispute by Nov. 10. Homeowners flagged as potentially eligible had faced a Tuesday deadline to apply for exemptions, but the city extended that to Oct. 13.
The tax on second homes is a signature policy of Mayor Zohran Mamdani. The levy applies to single-family homes with market values of $5 million or more, and co-ops and condominiums worth at least $1 million. New York City officials plan to include the surcharge on property tax bills due Jan. 1.
The ruling by Justice Wayne Ozzi on Staten Island came in a suit that didn’t challenge the legality of the tax itself. Instead, the suit claimed the city’s publication of potentially eligible addresses and its requirement that owners apply for exemptions were unlawful. The judge agreed and ordered the city to start over.
Ozzi had previously blocked the rollout of the tax in an August ruling. But that order was also stayed by the appeals court. The city had also said that the Staten Island ruling would be automatically stayed during its appeal.
In a Tuesday statement announcing the new exemption application deadline, the city’s Department of Finance called the lawsuits “meritless” and said, “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.”
Lawyers who filed the Staten Island suit declined to comment on the latest developments.
The city sent 17,000 notices in July to properties that are valuable enough to be subject to the tax, but may be eligible for an exemption if they’re used as a primary residence. City officials said Tuesday they had granted 5,200 exemptions out of roughly 9,300 applications reviewed.
Two lawsuits filed last week, including one by former US Commerce Secretary Wilbur Ross and casino tycoon Steve Wynn, challenged the constitutionality of the levy because it only targets people who live outside the city. Those suits are unlikely to be resolved during the tax’s rollout.
