A Brooklyn-based appeals court froze Justice Wayne Ozzi's Sept. 29 order, letting New York City keep rolling out its second-home surcharge while the judges review the case. They said a decision is coming by Nov. 10. The city also moved the exemption application cutoff from Tuesday to Oct. 13.
This back-and-forth is familiar. Justice Ozzi previously paused the rollout in August, and the appeals court later lifted that stay. City officials also pointed out that filing an appeal would, by default, pause the Staten Island decision.
This is one of Mayor Zohran Mamdani's marquee housing ideas. It applies to second homes - single-family properties priced at at least $5 million, as well as co-ops and condos with values of $1 million or above. The charge applies to second homes: single-family properties worth at least $5 million, plus co-ops and condos starting at $1 million. The city plans to add the surcharge to property tax bills due Jan. 1.
In July, the city sent 17,000 notices to properties that appear valuable enough to be covered but could qualify for a primary-residence exemption. As of Tuesday, officials said they had granted 5,200 exemptions after reviewing roughly 9,300 applications.
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The Staten Island case did not attack the tax itself. It targeted the city's decision to publish a list of potentially affected addresses and to require owners to apply for exemptions, arguing both moves were unlawful. Justice Ozzi agreed and told the city to start over. Lawyers for the plaintiffs declined to comment on the latest turn.
On another front, two lawsuits were filed last week - one of them brought by former US Commerce Secretary Wilbur Ross alongside casino tycoon Steve Wynn - asserting that the levy is unconstitutional because it singles out nonresidents. It's improbable those cases will be settled while the rollout is underway.
According to the city's Department of Finance, the lawsuits are "meritless," adding, "While this legal process moves forward, we will continue administering the surcharge fairly, efficiently and in full compliance with the law, as we have done from day one."
If you received a notice and the property is your primary home, the Oct. 13 exemption deadline is the date to watch. If you own a high-end second place in the five boroughs, expect this surcharge to show up on the Jan. 1 property tax bill and adjust your 2024 cash flow accordingly.
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