Second homeowners in New York won’t get a break from the city’s pied-à-terre tax. On Wednesday, four justices from the New York Supreme Court’s Appellate Division overturned a lower court’s ruling that would have halted the tax’s rollout.
The panel found that the petitioners, including Kenneth Fishel of Renaissance Properties, lacked standing because they weren’t harmed by being listed or receiving notices. The judges compared the supplemental roll to the Department of Finance’s annual assessment rolls, noting that taxpayers routinely spend time and money to meet their obligations.
Court rejects challenge to New York’s second home tax
The Department of Finance has granted exemptions, reducing the number of potentially eligible properties from 900,000 to fewer than 9,000. Former Deputy Mayor Randy Mastro, representing the petitioners, argued that the notices and listing caused harm by requiring resources to secure exemptions. All his clients eventually received exemptions.
Mastro criticized the city’s handling of the surcharge, calling it “unconscionable” and a “lawless and chaotic data collection scheme.” He plans to continue challenging the tax on constitutional grounds, with a case expected to be decided next month.
Wealthy homeowners fight tax on properties over $5 million
The city defended the tax, stating that owning a second home worth over $5 million should come with a responsibility to the city that makes it valuable. The appeals court’s decision was seen as a victory for the city, with a spokesperson stating that the ultrawealthy have tried to avoid paying their fair share.
Mastro is also involved in a separate lawsuit in Suffolk County, challenging the tax’s constitutionality. Another challenge, brought by developer Steve Wynn and former Commerce Secretary Wilbur Ross, makes similar claims. The city remains committed to defending the law against these challenges.
Tax commission to hear further appeals
The Tax Commission will hear additional appeals, further reducing the number of properties subject to the tax. The city’s spokesperson vowed to work with partners in Albany to defend the law, while Mastro expressed confidence in the constitutional challenge’s success.
The pied-à-terre tax, targeting second homes worth over $5 million, has faced opposition from wealthy homeowners. The appeals court’s decision allows the city to move forward with its rollout, though further legal challenges remain.
