By 5 Towns Central Staff

NEW YORK (August 27, 2026)

The city is giving property owners more time to respond to New York City’s new second-home tax as a legal fight over the controversial policy continues in court.

In a recent filing with Manhattan Supreme Court, the city said it has determined that 1,210 property owners initially flagged as potentially subject to the tax have established that the properties are their primary residences. Another 2,892 owners have had their appeals approved, while 2,652 cases are still being reviewed.

The city had previously notified roughly 10,800 property owners based on information from the prior tax year. Officials have now pushed the deadline for homeowners to submit residency documentation to October 6, marking the second extension since the program was introduced.

City attorneys defended the verification process, acknowledging that proving residency can be burdensome but arguing that the requirement itself does not make the tax unlawful.

The surcharge is a major component of Mayor Zohran Mamdani’s campaign to increase taxes on wealthy New Yorkers. Under the policy, eligible one- to three-family second homes valued above $5 million face a 4% surcharge, while certain co-ops and condominiums valued at more than $1 million are also covered.

Property owners challenging the policy argue that the city mishandled its rollout after releasing a list containing nearly 1 million properties that could potentially have been affected, creating widespread confusion and alarm. City officials estimate that approximately 17,000 properties could ultimately be subject to the surcharge.

A judge initially issued a temporary block on the tax earlier this month, but that order was subsequently lifted following an appeal by the city. Oral arguments in the case are expected Monday in Manhattan.

Despite the ongoing litigation and the city’s review of thousands of properties, the Mamdani administration continues to project that the tax could generate more than $500 million annually, which officials say would help address budget shortfalls and finance the mayor’s policy priorities.

Randy Mastro, an attorney representing the property owners, characterized the latest filing as evidence of a major administrative failure. He argued that the city improperly required thousands of homeowners to prove they reside in their own properties instead of determining eligibility before sending out notices.

President Donald Trump has also criticized the measure, calling it a “dangerous political experiment” and saying he is considering whether the federal government could take steps to prevent it from being implemented.