Hundreds of additional homeowners will get letters explaining that they are exempt from the city’s new luxury second-home tax.

The development was detailed in a new court filing from the city, fighting a lawsuit challenging the rollout of the pied-à-terre tax.

Even with the new exceptions, Mayor Zohran Mamdani is still banking on getting $500 million a year from the surcharge being rolled out.

“We continue to be confident in that assessment of what the annual revenue will look like,” he said.

In the city’s filing, 1,210 letters are going to homeowners explaining that their property is exempt from the surcharge — effectively rescinding an earlier letter from July informing them they must pay or prove they live in New York City.

“At the time that we sent those out, we did not have access to the 2025 income tax filings,” Mamdani said.  

The city’s Finance Department got that information days after a group of homeowners sued the Mamdani administration over the rollout.

“They now have to tell 1,200-plus New Yorkers, ‘Oops, nevermind, we were wrong,'” Randy Mastro, the attorney who filed the suit, told NY1. “It’s tantamount to a damning admission that the Mamdani administration massively screwed up.”

Property tax lawyer Ben Williams said city officials could have requested that information earlier, as the city has now determined the homeowners who filed suit are exempt from the surcharge.

“The city is making an argument that there’s no harm to any of the plaintiffs, but it also proves Randy right in that the city should have done the screenings better from the beginning,” Williams, attorney at Rosenberg and Estis, told NY1.

Of the roughly 17,000 letters the city sent to homeowners this summer explaining they may have to pay the tax or prove they are exempt:

  • 5,544 exemption applications received
  • 2,892 exemptions granted
  • 1,210 received new exemption letters
  • 10,800 letters sent to property owners where it was either unclear if the property was exempt or the property was placed in a trust or limited liability company

Mastro expects most of the homeowners who applied for an exemption to get one.

“That’s about 40% of all the people who got the threatening notices, the city’s going to have to admit, ‘You know, don’t owe the pied-à-terre tax,'” Mastro said.

The city also once again extended the deadline for exemption applications. It was originally this month, now it’s Oct. 6.