(The Center Square) — Wealthy households are scrambling to avoid New York City’s new second-home tax, with thousands seeking an exemption from the Mamdani administration.
Nearly 5,000 property owners have begun the process of applying for an exemption to the pied-à-terre tax, according to the city’s Department of Finance, while about 2,000 property owners have submitted their applications. An estimated 17,000 households may be subject to the tax.
The new levy was approved by Gov. Kathy Hochul and lawmakers as part of a New York City bailout and calls for charging eligible property owners a 4% surtax on one- to three-family second homes valued over $5 million and on co-ops and condos valued at $1 million.
To obtain an exemption, property owners must prove that their home in New York City is their primary residence. They will be required to show identification, such as a driver’s license, utility bills, their most recent federal and state tax returns, a mortgage or lease agreement and other documentation to get an exemption. That must be completed by Sept. 18, the city says.
Mamdani said the new tax, which is expected to drum up $500 million in annual revenue, will force part-time New Yorkers to “pay their fair share” of the city’s operating costs.
But his administration has been criticized for a confusing rollout of the new tax, including the release of a database of affluent property owners who could be subject to it.
Critics say Mamdani’s ‘tax the rich’ campaign exposes affluent property owners to doxxing harassment and threats with their names, addresses and other details posted online as part of a List of homeowners who could be subject to the new tax.
The Mamdani administration announced over the weekend that homeowners who may be subject to tax on second homes now have until Sept. 18 to file appeals with the city for an exemption. The previous deadline was August 21.
The new tax has been strongly criticized by New York City real estate groups, who say it will cost jobs, increase property values, weaken New York City’s economy and accelerate an exodus of wealthy households to lower tax states.
