Dive Brief:
- A Staten Island judge on Monday sided with a handful of homeowners who challenged the rollout of New York City’s planned surcharge on high-end second homes, canceling the city’s 17,000 mailed notices concerning the tax.
- The judge found that the city improperly placed the burden on homeowners to prove they were not subject to the new tax in the notices and said new notices, if issued, must disclose how the city determined the homeowner may be eligible.
- The city is expected to challenge the ruling, Politico reported.
Dive Insight:
New York City’s luxury second home tax, also known as the pied-à-terre tax, places a surcharge on high-end secondary homes, including one-, two- and three-family homes valued at $5 million or more and condos and co-ops valued at $1 million or more.
The surcharge, introduced in April, is expected to impact around 13,000 homes and generate $500 million for the city in fiscal year 2027, according to the city comptroller.
Several homeowners sued the city last month as it took steps required to implement the new tax, including notifying those potentially impacted.
Plaintiffs also took issue with the city’s publication of 900,000 residences on its Department of Finance website that it called a "supplemental roll” of properties. The “vast majority” were not subject to the new tax, according to court filings.
The judge on Monday ordered the city to remove residences from the list that are not directly subject to the tax.
