James Fanelli, Deborah Acosta & Caitlin Ostroff (Wall Street Journal): Mamdani’s Pied-à-Terre Tax Hits Wealthy Out-of-Towners With a Double Whammy

As the Mamdani administration looks to levy the new tax and increases scrutiny of where the city’s elite reside, some face an unwelcome double whammy as they also stand to lose an abatement that shaves thousands of dollars off their annual tax bills, premised on the idea that their New York City apartments were primary residences.

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Others are in a similar pickle. According to a Journal analysis of public records in New York and Florida, which has seen an influx of wealthy New Yorkers in recent years, some Sunshine State residents have been receiving the city’s abatement for years despite being ineligible for it. They include real-estate executive Lee Millstein, hedge-fund honcho Ruben Kliksberg and financier Ronald Olin.

In an effort to ameliorate the city’s budget crunch, the Mamdani administration earlier this year also said it would strengthen verification efforts to weed out owners who shouldn’t be getting the primary-residence abatement. So far the audits have led to the removal of 10,000 apartments from the program, according to city officials. 

To apply for the abatement, apartment owners must certify to their building’s condo board or property manager that their units are their primary residence. The board or manager then annually attests to the city that the information is up-to-date and accurate. 

“It’s a really flawed system,” said Paul Brensilber, president of property-management company Jordan Cooper. Typically, property agents send out questionnaires to owners annually for updated information, but some go unanswered, he said.

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There were clues for the city that Kliksberg, Millstein and Olin didn’t live in New York. The property-tax bills it sent them were addressed to out-of-state residences.

Previous TaxProf Blog Coverage:

• Zelinsky: Why New York’s Pied-à-Terre Tax Is Unconstitutional
• Wilbur Ross, Steve Wynn Sue Over New York Pied-a-Terre Tax
• “Taylor Swift Tax” Draws Suit From Rhode Island Homeowners
• Pied-à-Terre Owners Sue NYC, Seek to Avoid Tax
• (Even) More on NYC’s Pied-à-Terre Tax
• NYC Limits Options for Owners of Second Homes to Appeal New Tax
• NYSBATS Report on NYC’s Pied-à-Terre Tax
• More on NYC’s Pied-à-Terre Tax
• The New York Pied-à-Terre Tax: What You Should Know