Three New York City homeowners have filed a lawsuit against New York City, claiming that the luxury "second home" tax proposed by U.S. New York City Mayor Zohran Mamdani has been unfairly levied, the Wall Street Journal (WSJ) reported on the 7th, local time.

According to the report, the three plaintiffs, including New York City homeowner Rachel O'Brien, stated in the lawsuit filed in a New York state court that there were procedural errors in the enforcement of New York City's high-priced second home taxation. They asked the court to postpone the implementation of the tax and require New York City to restart the taxation process.

The plaintiffs argued that New York City tax authorities unfairly shifted the burden of proof onto homeowners to prove they are not subject to the tax, without conducting proper due diligence to identify owners of high-priced second homes.

Randy Mastro, an attorney representing the plaintiffs, told the WSJ, "This tax enforcement is a complete mess," criticizing it as "an attempt to shift the responsibility onto New York City homeowners to prove that they actually reside in the taxed properties."

Previously, the New York State Legislature passed a new real estate tax bill in late May imposing additional taxes on high-priced homes in New York City valued at $5 million (approx. 7 billion won) or more that are not used as primary residences by their owners, and the bill went into effect on the 1st of last month.

Many wealthy Americans live in other regions while owning second homes in major urban centers like New York City, and the purpose of the law is to increase tax revenue from the wealthy by imposing additional taxes on these properties.

The New York City second home tax plan has faced fierce backlash from billionaires and the wealthy.

When proposing the second home tax plan, Mayor Mamdani cited the case of Ken Griffin, founder of hedge fund Citadel, who purchased a penthouse near New York's Central Park in 2019 for $238 million (approx. 335.5 billion won)—the highest real estate transaction price at the time—to argue for the legitimacy of the tax.

On the other hand, heavyweights in the hedge fund industry, including Griffin and Bill Ackman, have countered that Mayor Mamdani's tax hikes on the rich will ultimately harm New York City.

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