Staten Island Ruling on the City’s Implementation of the Tax
A Staten Island Supreme Court judge ruled that the New York City Department of Finance (DOF) improperly implemented the second home tax. The judge ordered DOF to cancel the approximately 17,000 notices already sent to property owners, remove the supplemental tax roll and determine which properties are subject to the tax before issuing new notices.
The ruling addresses how the City implemented the tax. It does not strike down the tax itself.
Where Things Stand Now
The City has appealed the decision and maintains that its appeal automatically puts the judge’s order on hold. The plaintiffs disagree and maintain that the order remains in effect unless the City obtains a stay from the Appellate Division.
Under the judge’s order, the previous notices are canceled and the October 6 deadline associated with those notices no longer applies. However, if the City obtains a stay, the judge’s order would be put on hold and the existing notices and October 6 deadline could be reinstated while the appeal proceeds.
The tax administration process remains in place. If a property owner receives a new notice from the City and disagrees with the City’s determination, they should follow the existing process to challenge it.
Stay tuned while the appeal proceeds and for additional guidance as it becomes available.
Other Lawsuits Challenging the State’s Second Home Tax
Two lawsuits challenging the constitutionality of the tax were also filed.
The former U.S. Commerce Secretary Wilbur Ross, Hilary Geary Ross and Steve Wynn filed a lawsuit in Suffolk County Supreme Court.
Additionally, a separate REBNY-supported lawsuit was filed in the same court on behalf of New York City property owners and a co-op. The plaintiffs are represented by Randy Mastro and Dechert LLP, the same legal team that brought the Staten Island case. Mastro’s team has asked that the REBNY-supported lawsuit be assigned to the same judge as the Ross/Wynn case and treated as a related case.
REBNY has raised concerns about the pied-à-terre tax since it was proposed, including its impact on New Yorkers who were not intended to be subject to the tax, the burden on property owners and co-ops and significant implementation issues. The legal challenges now underway raise many of these same concerns.
I will closely monitor these cases and provide updates as they move forward.
