The Mamdani administration has acknowledged that it wrongly warned more than 1,000 New Yorkers they could face a pied-à-terre tax bill unless they proved their homes were exempt, according to newly filed court records.
In filings submitted Tuesday, city lawyers also disclosed that affected property owners will now have until October 6 to apply for an exemption from the new surcharge.
That marks the second extension of the deadline, which was initially set for late August before being pushed back to September 18 amid sharp criticism over how the city rolled out the tax.
The Department of Finance sent 17,000 notices as part of the launch of the levy, which targets luxury second homes in New York City. The letters warned recipients that they might be subject to the tax, while giving them a chance to challenge the determination.
But in the court filings, the DOF conceded that at least 1,210 of those notices were mistakenly mailed to addresses that are actually primary residences. The agency said it is working to fix the error as additional 2025 personal income tax information becomes available.
At least 5,500 people who received notices have filed appeals, and 2,900 had been approved as of Tuesday, a DOF spokesperson confirmed. In all, 11,000 people began applications seeking exemptions.
The disclosures came in court documents tied to an ongoing lawsuit challenging the city’s troubled rollout of the surcharge. The pied-à-terre tax applies to unoccupied, non-primary residences, including one- to three-family homes valued at $5 million or more, as well as co-ops and condos worth at least $1 million.
The state law establishing the tax, passed by the Legislature and signed off by Gov. Kathy Hochul this spring, took effect last month.
Randy Mastro, an attorney for the plaintiffs in the Staten Island Supreme Court suit, said the city essentially admitted to a massive gaffe in the new filings.
“The city’s latest submission is tantamount to an admission of a massive screw-up by the Mamdani administration,” said Mastro, who served as first deputy to former Mayor Eric Adams.
“Instead of doing the homework and determining who actually owed the surcharge … the Mamdani administration switched the burden on to thousands and thousands of New Yorkers who now have to prove they actually live in their own homes,” he said.
The city also noted in the filings that the five suing homeowners have had their exemptions approved.
Because of the newly obtained 2025 tax data from the state, the DOF will also be sending another 10,800 letters by August 31 reiterating homeowners that they’ll need to prove their address is their primary residence or be on the hook. Among those are 6,400 to entity- and trust-owned properties and 4,400 addresses that the DOF said it couldn’t determine were primary homes, according to the filing.
“From the beginning, we have been committed to ensuring that New Yorkers have the time and information they need. Property owners have until October 6th to file an exemption application. We have received the tax information from the state for 2025 and want to give New Yorkers more time to apply for an exemption, if applicable,” a DOF spokesperson said in a statement.
The next hearing for oral arguments in the case is scheduled for August 31.
