Pitched as a Billionaire Tax, New York’s Pied-à-Terre Levy Billed an 85-Year-Old Retiree $83,603

New York’s new pied-à-terre tax was pitched as a way to make billionaires pay. One of the people now holding a bill is Kent Barwick, an 85-year-old retired civic leader who once ran the city’s Landmarks Preservation Commission. According to the New York Post, the surcharge hit Barwick and his wife, June, with an $83,603 bill on their Little Italy co-op, on top of the $24,984 they already pay in regular property taxes.

The Barwicks are now plaintiffs in a lawsuit, funded by the Real Estate Board of New York, that argues the tax is unconstitutional. Their story, and others like it, is turning a slogan into a reckoning.

A $108,587 tax tab for two retirees

Barwick is a New York City civic fixture. He headed both the Landmarks Preservation Commission and the Municipal Art Society. He bought his co-op on Mott Street in 1972 and lived there full time until he and June moved upstate a few years ago, keeping the apartment as a part-time residence. The city values it at nearly $2.1 million, the Post reported.

When the second-home tax kicked in, their total property-tax bill jumped to $108,587. “For us, for people of modest means, both retired, it meant suddenly getting a property tax bill that was four times higher than what we were paying,” Barwick told the Post. “Now we have to figure out a way to come up with an additional $80,000.”

June conceded the couple might have to sell the co-op if they cannot come up with the money. The bills are due in January.

Billed on the way out the door

The Barwicks are not alone. Scott Golden and his wife, Stephanie Cohen, sold their Upper West Side condo in July for $6.55 million and thought they were finished with New York’s taxes. Instead, the Post reported, they were hit with an additional $48,949 bill on the way out, roughly 25 times their regular property tax bill.

“I think it’s blatantly unfair that they are targeting and discriminating against out-of-staters,” Golden, 63, said. “And there was no ability to plan in advance. If we had known, we would have sold earlier.”

That last point is central to the case. The tax was enacted on May 28 by the Democratic-controlled state Legislature and Gov. Kathy Hochul, at the request of Mayor Zohran Mamdani, to raise $500 million for the city budget. But it reaches back to Jan. 5, nearly five months before it became law.

Who the tax actually hits

The surcharge applies to second homes that are not an owner’s primary residence: one-, two- and three-family homes valued at $5 million or more, and condos and co-ops valued at $1 million or more, according to NBC New York and the New York Daily News. That $1 million line for apartments is a long way from billionaire territory in Manhattan.

The rollout has been messy. The city’s Department of Finance posted a list of roughly 900,000 properties and sent letters to about 17,000 owners saying they had been identified as owing the tax unless they proved otherwise. Homeowners sued over that process in state court on Staten Island in August. On Sept. 29, in a challenge to that process, a judge ruled against the city, finding, as NBC New York reported, that the city cannot put owners on a list and force them to prove they are exempt, and ordering officials to essentially start the process over.

Mamdani’s administration did not back down. “Today’s decision is wrong, and we will invoke a stay of the injunction,” mayoral spokesperson Matt Rauschenbach said. The city appealed.

The constitutional challenge

The new suit, filed Sept. 29 in state Supreme Court against the Hochul administration, goes further. It alleges the tax violates the U.S. and New York constitutions by unlawfully discriminating against nonresidents, imposing unfair burdens on homeowners and co-op buildings, and applying retroactively. Plaintiffs include the Barwicks, Golden and Cohen, another homeowner, and a city co-op. Their lawyer is former Deputy Mayor Randy Mastro.

A separate suit by former Commerce Secretary Wilbur Ross and casino developer Steve Wynn, both Florida residents, also argues the tax discriminates against people who do not primarily live in New York. A Hochul spokesperson responded that when Wynn and Ross cast themselves as sympathetic figures, “they’re making the case for the pied-à-terre tax as well as anyone could.”

The Barwicks are harder to dismiss that way. Jim Whelan, president of the Real Estate Board of New York, said the plaintiffs show the “second-home tax is hurting New Yorkers, not the out-of-state billionaires its supporters promised to target.”

The other side

The governor is unmoved. “While this lawsuit about the administration of the tax is a matter for the city and the courts to work through, the governor continues to believe that people who can afford a multimillion-dollar second home in New York City can afford to pay their fair share,” Hochul spokesperson Kassie White said. The mayor’s office did not return the Post’s messages.

But “fair share” is doing a lot of work. The Barwicks bought their apartment in 1972. Its value today reflects five decades of New York real estate, not a hedge-fund windfall. Being house-rich does not make a retired couple cash-rich, and a bill four times larger than last year’s, applied to months before the law existed, is not a rounding error.

New York promised a tax on billionaires, and an 85-year-old preservationist who bought his apartment in 1972 got the bill.

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