What a lawsuit over Rhode Island’s pied-à-terre tax could mean for New York

Co-chair of Herrick's Condominium & Cooperative practice, Andrew B. Freedland, was quoted by The Real Deal in an article discussing the possible New York City ramifications of the news that a group of forty Rhode Island homeowners filed a lawsuit challenging the state's new tax on luxury second homes (properties assessed at $1 million or more). They argue that the law is unconstitutional because it unfairly targets non-residents who cannot vote in Rhode Island. The tax has been dubbed the "Taylor Swift tax" due to the singer's high-profile vacation home in the state. The case is being closely watched because New York City recently implemented its own evolving pied-à-terre tax on luxury second homes.

Andrew noted that while the Rhode Island lawsuit could provide a framework for potential actions in New York, "it’s got a long way to go before it really has any sort of precedential value," if it ever even gets that far. He also cautioned that while the taxes are somewhat similar, they are separate laws playing out in completely different states and apply different tax rate structures — all of which could impact how challenges to the New York tax shape up.

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