Confusion reigns over eligibility for Mayor Mamdani’s pied-à-terre tax

Nearly a week after New York City tax officials released information on who could potentially be on the hook for a new  pied-à-terre tax, attorneys and homeowners said they were baffled by the process overseen by Mayor Zohran Mamdani’s administration.

At the center of the confusion was a database posted by the Department of Finance on Friday of more than 900,000 properties that “may” be subject to the new surcharge — causing some to believe their homes were mistakenly subject to the tax. A City Hall official clarified Wednesday the city had sent out letters to only 17,000 addresses it suspects are second homes worth more than $5 million.

“ We are being inundated with calls and emails from owners of co-op and condo apartments and townhouses who got the Department of Finance's notice,” said Ben Williams, who leads the property tax department at Rosenberg & Estis. “ I don't know why they did it like this.”

Michael LaPayower was among the homeowners whose residence appeared on the database. He said he’s lived in his Staten Island home since 2011 and that his wife and mother-in-law lived there before that. He said he was “astonished” to find his name on the list of properties that could potentially be subject to the tax.

“Why are we being targeted?” said LaPayower, 45. “Why are we on this list when I thought the requirements were for people that don't primarily live in New York?”

Mamdani’s critics seized on the confusion as an example of an unnecessarily adversarial approach to property owners. In February, Mamdani threatened to raise taxes on property owners to help plug a multibillion-dollar budget gap. He backed off the proposal after the measure received little political support.

“This was in poor form as publishing names/addresses singles out people who have done nothing wrong, at a moment when the far extremes of the political spectrum already treat success itself as something to be punished,” said Steve Fulop, the president of the Partnership for New York City.

Mamdani defended the process during an unrelated press conference on Wednesday.

“ We are committed to ensuring that this is a tax only levied upon those whose second homes are worth more than $5 million,” Mamdani said. “And the reason that we wanted to conduct outreach months in advance of when the tax would be levied would be to ensure that that exact premise would be fulfilled.”

Mamdani cast the  pied-à-terre tax in April as a big win for his effort to tax the wealthy to pay for social services. The surcharge initially applies to single-family homes worth $5 million or more and co-ops and condominiums worth at least $1 million that are not a primary residence.

But some homeowners said they received letters at their full-time address.

Upper West Side resident Karen Young said she received a letter Saturday identifying her home as a potential pied-à-terre. She would be on the hook for a nearly $43,000 tax bill unless granted an exemption.

Her home “is and always has been our primary address,” she said. “There is no other address.”

Young said she’s been unable to upload her driver’s license to the city website, and had to pay an estate lawyer to dig up the title to her brownstone.

“I just find the whole thing obviously incredibly insulting, and as goofy as this probably sounds, I am so personally hurt,” she said. “ This whole setup with Zohran's approach to taxing pied-à-terres is you're guilty until you prove your innocence.”

Young has until Aug. 21 to submit her appeal.

Property tax attorneys who’ve been closely following the pied-à-terre tax's rollout said they found the process scattershot and confusing.

“ It seems like what the city is doing is basically asking taxpayers to do a little bit of their work for them,” said Adrian Diaz, an attorney at Hogan Lovells Cadwalader.

He said he’s heard from about 10 clients who received pied-à-terre tax letters to their primary residences.

“ They're sending it out to everyone who is above the threshold, and then saying, ‘Hey, is this your primary residence or not?’” he said.

City officials said they’re simply following the new state law laying out the pied-à-terre tax.

“ What we did is following through with the law as it stands,” Mamdani said.

A representative for Gov. Kathy Hochul said the law only requires the city to include the new tax in the already available public tax rolls.

“Any questions about the way in which this program is being implemented or publicized can only be answered by City Hall,” Hochul spokesperson Jen Goodman said.

Elizabeth Kim and David Brand contributed reporting.