A trio of Big Apple homeowners has filed suit to delay the state’s controversial new tax on luxury second homes — claiming Mayor Zohran Mamdani’s administration bungled the rollout and unfairly put the burden on homeowners.
The disgruntled owners charge that City Hall is unfairly burdening them by forcing them to prove they are full-time New Yorkers if they do not want to pay the pied-à-terre tax, according to the suit filed Friday in Staten Island Supreme Court.
The city Department of Finance “has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge,” the filing states.
It also calls out the DOF’s move to publish a tax roll of nearly 1 million properties that may be subject to the new surcharge and the 17,000 notices it mailed to homeowners warning them they would be hit with five-figure bills unless they file for an exemption.
One of the plaintiffs, Mamdani-supporting Manhattanite Simon Hedley, told The Post he doesn’t take issue with the law itself – but opposes how the city is distributing the “threatening” notices.
Hedley, whose sole home is in Chelsea, has no idea how he ended up on Hizzoner’s list and said the onus to prove residency should be on the city.
“I just think that if they’re going to be in the rollout process, the Department of Finance is obviously managing it — they’ve got endless access to records to really get a fairly accurate idea about who’s resident and who isn’t,” Hedley told The Post Friday.
“They don’t seem to have done any due diligence around town, as far as I can tell; they’ve scattergunned thousands and thousands of people without really knowing who’s who.”
“Now, it’s the burden of proof on the residents to prove they are residents,” the frustrated New Yorker said.
The city ignored its statutory obligation to do its homework first “to diligently assess and determine, using the vast resources at its disposal, the properties that are actually subject to the Surcharge,” the suit claims.
While the lawsuit does not challenge the law itself, it demands that a judge order the immediate scrubbing the 900,000-name list from the DOF website, claiming its publication “set off a panic among New York City homeowners.”
The city has already “furiously backpedaled” to later state that the list was “meaningless,” according to the suit.
The list “should never have been posted in the first place” and “has caused mass confusion as a result, and should therefore be immediately removed from DOF’s website,” the lawsuit says.
The suit also requests an emergency injunction to void the 17,000 mailed notices and relieve homeowners from having to respond. The Mamdani administration last weekend extended the deadline to file for an exemption to Sept. 18, from the end of August.
“We shouldn’t be getting letters like this, you know, which is somewhat a somewhat threatening letter,” Hedley fumed.
Hedley added that he, “like many others, are genuinely in support of many of the things that Mamdani is doing for the city to make it a better place. But in the execution of this particular one,” the mayor needs to “get it right.”
The plaintiffs are represented by lawyer Randy Mastro, who served as first deputy mayor under Mamdani’s predecessor, Eric Adams.
Two of the suing homeowners are the wife and father of City Councilman Frank Morano, Rachel O’Brien and Carmine Morano both Staten Island residents; the third is a Chelsea resident, Simon Hedley. All claim they either received a notice letter that referred to their longtime primary residence, or that it was listed on the published tax roll.
“City Hall did this backwards,” the Republican pol told The Post. “This lawsuit is about forcing the administration to follow the law, clean up a botched rollout and stop making New Yorkers prove facts the government may already have at its fingertips.”
The law, approved by the state Legislature and Gov. Kathy Hochul, is meant to apply to one- to three -family homes worth at least $5 million and co-ops and condominiums valued at $1 million or more that are unoccupied, non-primary residences.
Ahead of the notices being sent out, Mamdani last month released a taunting video telling owners of second homes worth more than $5 million to “check your mailbox.”
But the warning letters sent out by DOF roughly tripled the number of homes that would be subject to the law, said the department’s former commissioner, Martha Stark.
According to the city’s own published data, fewer than 3% of the 960,000 properties on the tax roll — roughly 24,000 — “meet the statutory value threshold” of $5 million for one- to three-family homes and $1 million for co-ops and condos, Stark said in an expert affirmation filed alongside the suit.
Stark, who has also been involved in a decade-long lawsuit over the city’s property tax system, claimed that the 17,000 letters were “strikingly over-inclusive” and estimated that the true number of subject properties was between 5,000 and 6,000.
State law permitted the city to gain access to a far larger set of records — such as state income-tax data — to aid in assessing the properties subject to the new levy, “yet it published a list untethered to that information,” Stark claimed about the DOF.
Mastro himself said he received one of the notorious notices at his Upper East Side home, a massive six-bedroom townhouse he purchased for $14.3 million in 2016 and has lived in since.
“Given my recent employment by the city — in a high level role requiring that I reside in New York City no less, it is inconceivable that the City’s Department of Finance did not have records available to it demonstrating that my primary residence is at the property to which it sent me this notice,” Mastro wrote in a court filing.
The suit names the city, Mamdani in his official role as mayor, the DOF and its commissioner, Richard Lee, as the plaintiffs.
Mamdani spokesman Matt Rauschenbach said the Department of Finance “has been working around the clock” to provide information to people who may be subject to the new tax.
“As the mayor has said, we also know that whenever government asks something new of New Yorkers, we have a responsibility to make the process clear, transparent and accessible.”
Rauschenbach said the city Law Department will fight the suit in court.
Mastro has emerged as a legal foil to many of Mamdani’s initiatives, already facing off in court over a controversial relocation of the Bellevue’s men’s shelter to the East Village and the city’s rent-freeze on stabilized units.
Additional reporting by Ella Morrison
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