New York City homeowners have already beaten the city on more than half of pied-à-terre tax appeals, casting fresh doubt on Mayor Zohran Mamdani’s $500 million-plus revenue claim as court fights pile up.
Thousands of owners are fighting the new surcharge on luxury second homes, and the early results are not going City Hall’s way. The city’s Department of Finance told the New York Post that exemption applications had reached 10,000, with 5,700 already approved as of Friday morning.
That means most of the decided cases have gone to the homeowners. The tax hits co-ops worth more than $1 million and houses over $5 million that are not primary residences. Mamdani and Gov. Kathy Hochul sold it as a major new pot of money for city services.
Lawyers watching the numbers say the real take may fall far short of the pitch. Plaintiff attorney Ben Williams of Rosenberg & Ellis put the problem in plain terms.
“I think the bigger fiscal question is whether the city’s $500 million revenue estimate was realistic in the first place.”
Williams added that once primary residences are stripped out and inflated values are challenged, “we may find that the amount actually collectible is significantly less than projected.”
The administrative losses are only half the trouble. A little over a week ago, state Supreme Court Justice Wayne Ozzi sided with a challenge brought by lawyer Randy Mastro, the former first deputy mayor under Eric Adams. Ozzi ruled that the city must redo its entire rollout of the tax plan from scratch.
Just the News reported that Ozzi found the city had prematurely blasted notices to roughly 17,000 owners and ordered officials to replace a sprawling exemption list covering nearly a million properties with a list that names only those actually subject to the levy. The surcharge itself is a 4% add-on on qualifying one- to three-family second homes and co-ops or condos.
Ozzi’s order said homeowners were “being substantially harmed and penalized needlessly.” Mastro was blunt about the city’s response.
“City Hall botched this rollout and should have just admitted the errors and fixed its own mistake, instead of wasting time and taxpayer dollars by fighting it in court.”
City Hall immediately appealed and won a stay, so collection continues while the case moves. Finance officials still insist the revenue projection holds. A department representative, repeating Mamdani’s August line, said the administration remains “confident in that assessment of what the annual revenue will look like.”
Another Finance voice cast the levy as simple fairness, saying luxury second-home owners should “contribute their fair share toward schools, safer streets, and the services New Yorkers rely on.” Officials also labeled the lawsuits “meritless” and claimed they had created “a lot of unnecessary confusion.”
Even with the stay, the city has been forced to keep moving the goalposts. The appeals deadline has already shifted three times and now sits at October 13, pushed from Oct. 6 after the Mastro action. Finance said it extended the window so New Yorkers would have “the time and information they need to apply.”
Two other cases arguing the tax unfairly targets out-of-state owners are still being heard on Long Island. Separate litigation has drawn in high-profile names, including former Commerce Secretary Wilbur Ross and casino executive Stephen Wynn. Real-estate lawyer Joshua Wurtzel of Schlam Stone & Dolan LLP warned what an adverse final ruling would mean.
“If the court’s decision ends up being upheld on appeal, which I think there’s probably at least a decent chance [of] that, then all of this kind of goes out the window.”
City figures themselves have already narrowed. After the initial wave of 17,000 letters, officials later described the pool of potentially affected owners as closer to 10,000 to 13,000. That shrinkage, stacked on top of the exemption wins, chips directly at the half-billion-dollar promise.
Mamdani has spent months casting his mayoralty as proof that left-wing politics can scale, even calling the 2026 midterms a national proving ground for the DSA in earlier remarks on the party’s reach. A tax that was supposed to bankroll that vision is now stuck in court and losing on the ground.
Finance still says it will keep administering the surcharge “fairly, efficiently and in full compliance with the law, as we have done from day one.” The stay lets them try. The exemption totals and the judicial order tell a different story about how clean the launch actually was.
The same City Hall that is fighting to keep this levy alive has been locked in other high-profile clashes, including demands that the Trump administration halt ICE operations in the city after a shooting involving a criminal illegal immigrant.
Homeowners who received the early letters and then had to scramble for exemptions are the ones living with the paperwork and the uncertainty. Many are not billionaires. They are owners of second apartments or houses that crossed the city’s new thresholds, now forced to prove primary-residence status or challenge valuations while the legal cloud hangs overhead.
Political pressure on Mamdani has been building on several fronts at once. Fellow Democrats have kept their distance after sharp criticism of his Oct. 7 Israel comments, a silence noted when Schumer and Jeffries stayed quiet during the blowback.
International figures have weighed in as well. Israeli Prime Minister Benjamin Netanyahu called out the mayor by name at the UN, accusing him of fueling antisemitism, adding another layer of controversy around the administration’s standing.
None of that changes the arithmetic inside the Finance Department. Ten thousand exemption applications. Fifty-seven hundred already granted. A state judge who told the city to start the rollout over. A stay that buys time but does not erase the ruling. And a $500 million-plus projection that lawyers say may never materialize once the challenged values and primary-residence claims are sorted.
The city can keep collecting under the stay and keep insisting the numbers will hold. Taxpayers and second-home owners watching the win rate and the court docket have every reason to treat that confidence as provisional until the appeals are finished and the checks actually clear.
When a “tax the rich” plan needs three deadline extensions, loses most of its early appeals, and draws a judicial order to scrap the rollout, the revenue pot starts looking a lot smaller than the campaign speech.