If you keep a high-end New York City place but call another state home, two very famous neighbors just took your side. Former US Commerce Secretary Wilbur Ross and casino mogul Steve Wynn brought their case in Suffolk County on Monday naming the State of New York as the defendant, Ross v State of New York, 628629/2026. Both are Florida residents. The complaint says Ross and his wife, Hilary Geary Ross, own property in Southampton and a Manhattan co-op, and that Wynn also owns property in Manhattan.
Their filing argues the pied-à-terre, or PAT, tax violates the Constitution because it targets people who do not make New York City their principal residence. It says nonresidents already pay "significant sums" in city property taxes, more than the "vast majority" of full-time residents, while using fewer services. The complaint adds, "Lawmakers have heralded the PAT Tax as a supposed solution to the City's longstanding budget problems that will generate substantial funds from 'outsiders' without asking full-time New York City residents - that is, those who vote in New York State and City elections - to pay more." It further warns that if the tax were "held to be constitutional, then every tax jurisdiction in the United States would be free to enact similarly discriminatory tax measures that favor their own residents in the ownership, maintenance, and sale of residential real estate."
The measure arrived as part of last spring's state budget and received Governor Kathy Hochul's signature in May, enacting it into law to help plug the city's budget gap. It applies to second homes valued above $5 million and to co-ops and condos valued above $1 million. The Mamdani administration has said it hopes the new tax will bring in $500 million during the current fiscal year.
The first invoices are slated to be mailed in January of 2027. Rhode Island has a comparable surcharge - dubbed the "Taylor Swift Tax" - that faces a constitutional challenge as well.
Governor Hochul's office pushed back hard. "When Steve Wynn and Wilbur Ross try to cast themselves as sympathetic figures in a fight over paying their fair share on multimillion-dollar second homes, they're making the case for the pied-à-terre tax as well as anyone could," a spokesperson said. "Governor Hochul believes some of the wealthiest people in the world, and the powerful interest groups fighting on their behalf, can afford to help pay for the police officers, trash pickup and snow removal that keep New York City running." A representative for state Attorney General Letitia James said they had no comment. Efforts to obtain comment from New York City Mayor Zohran Mamdani were unsuccessful.
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Ross says he received a July notice indicating his Manhattan property would face a surcharge of more than $83,000. Wynn says his New York City property was noticed for more than $183,000.
Separately, a Staten Island lawsuit filed in August by a group of homeowners sought to delay the tax's rollout rather than challenge its legality. That case, which is ongoing, has already pushed back key dates. For owners who thought they qualified for an exemption but still got notices, the original deadline to submit an exemption was Aug. 21; after two extensions, the cutoff is now Oct. 6.
There's more: on Tuesday, a different group made up of homeowners and a cooperative corporation lodged a comparable lawsuit against the state. Former New York City Deputy Mayor Randy Mastro, who also led the Staten Island case, brought the new challenge. "This tax was conceived in discrimination, enacted in haste, and rolled out in chaos," Mastro said.
"It is unconstitutional several times over, and it represents state overreach of exactly the kind the framers sought to prevent when they drafted and ratified the US Constitution." That lawsuit is funded by the Real Estate Board of New York. "We warned from the moment this tax was proposed that it was being rushed forward without sufficient consideration of its legal, practical, and economic consequences," said James Whelan, the group's president.
Ross and Wynn contend the levy runs afoul of the US Constitution by imposing "discriminatory burdens on nonresidents and interstate economic interests," and they maintain that "discriminatory classifications that burden the fundamental right to travel or lack a rational basis" are prohibited under the constitutions of the US and New York. However the court rules, the case could shape how cities and states try to tap revenue from nonresidents, and the complaint argues it could influence whether similar measures catch on nationwide. For anyone with a second home in New York City, the near term looks like continued legal wrangling, delayed deadlines, and a lot of close reading of notices.
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