Mayor Zohran Mamdani’s troubled pied-à-terre tax remains in effect for the moment after New York City filed an immediate appeal of a judge’s order blocking the rollout and requiring the removal of a massive public property list.
Staten Island Supreme Court Justice Wayne Ozzi granted three homeowners a temporary restraining order Monday, finding enough merit in their allegations to pause the city’s enforcement process until an Aug. 31 hearing.
But City Hall quickly filed a notice of appeal, which under New York law automatically stayed Ozzi’s order while a higher court considers the case. That means the city can continue implementing the surcharge unless the Appellate Division intervenes.
So, for homeowners attempting to follow this drama: The judge stopped the rollout. The city’s appeal stopped the stop. Welcome to New York government, where even the temporary restraining order needs a flowchart.
The lawsuit was filed by homeowners Simon Hedley, Rachel O’Brien and Carmine Morano. O’Brien is the wife of Republican City Councilman Frank Morano, while Carmine Morano is his father.
The plaintiffs are not presently challenging the Legislature’s authority to impose the tax itself. Their complaint targets the Mamdani administration’s method of identifying properties and forcing homeowners to prove that their primary residences are not second homes.
The Department of Finance mailed approximately 17,000 notices warning owners that their properties might be subject to the surcharge. The city also published a supplemental assessment list containing nearly 960,000 properties potentially connected to the rollout.
Owners who received notices were directed to submit documentation proving they qualified for an exemption—effectively placing the burden on residents to correct the city’s assumptions.
The plaintiffs called that process “arbitrary and capricious,” arguing that the government must make an individualized determination before assessing a tax or compelling residents to prove they do not owe it.
Ozzi temporarily ordered the city to remove the supplemental list, refrain from acting upon the mailed notices without first making individual determinations and suspend the approaching homeowner deadlines.
Councilman Morano called the ruling a victory for basic due process. “The court temporarily stopped the City from keeping the supplemental list online, acting on the mailed notices without first making the required individualized determination, and enforcing the deadlines on homeowners,” Morano wrote. “I’ve said from day one: verify first.”
Morano praised his wife and father for taking on City Hall but cautioned that the legal fight was only beginning. “I’m proud Rachel and my Dad were willing to stand up and fight City Hall, and Randy Mastro deserves tremendous credit for his legal work,” he added. “But this isn’t over. We fully expect the City to keep fighting.” “Government has to follow the law too. Now we keep going.”
The Mamdani administration insists the surcharge is legal, fair and necessary to make wealthy second-home owners contribute more toward city services.
“We disagree with today’s ruling, but we are confident in both the pied-à-terre surcharge and the City’s ability to implement it fairly and effectively,” mayoral spokesman Matt Rauschenbach said. “This surcharge asks those who own second homes valued at $5 million or more to contribute their fair share to the city they benefit from.”
Rauschenbach promised an immediate appeal, adding that City Hall would “continue with the pied-à-terre’s implementation.”
The surcharge generally targets high-value New York City properties that are not used as an owner’s primary residence. One-, two- and three-family houses become potentially eligible when the Department of Finance values them above $5 million. The assessment structure for condominiums and cooperative units can pull in properties at considerably lower assessed-value thresholds.
The city projects that the tax could eventually raise approximately $500 million annually. Mamdani has presented it as a way to close the budget gap without placing additional burdens on working-class residents.
“If you have a second home in New York City worth more than $5 million, check your mailbox when you’re back in the five boroughs—because you’ve got mail,” the mayor taunted property owners when the notices went out in July.
The mail arrived. So did the lawyers.
The homeowners’ criticism received support from Martha Stark, who served as New York City finance commissioner under Mayor Michael Bloomberg.
Stark argued in a court filing that the Department of Finance possessed more precise tools—including income-tax information and existing exemption records—to identify primary residences before publishing an enormous list and sending notices.
She reportedly estimated that only about 2.5% of the properties on the public list appeared to meet the applicable tax thresholds.
Plaintiffs’ attorney Randy Mastro, a former deputy mayor and veteran City Hall adversary, said Ozzi’s ruling vindicated homeowners who should never have been dragged into the process.
“We are very gratified by the judge’s decision, which has vindicated the rights of hundreds of thousands of New York City homeowners who were subjected to a process they never should have been a part of in the first place,” Mastro said.
The rollout has been particularly confusing for residents whose primary homes are held in trusts or limited-liability companies for estate-planning purposes. Because the listed owner is technically a legal entity, the Department of Finance may not immediately recognize that the property is occupied by its real owner as a primary residence.
More than 3,800 of the approximately 17,000 notice recipients had already submitted exemption applications as of the latest reporting. Gov. Kathy Hochul helped Mamdani announce the tax in April, declaring at the time:
“If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker.”
But as the rollout descended into confusion and litigation, Hochul created a little daylight between Albany and City Hall. “We’re not responsible for the rollout,” the Democratic governor told reporters Monday. “This is something that we talked to the city about in advance. It’s up to their city tax department,” she added. “We’ll encourage City Hall to try and streamline this.”
A Hochul spokeswoman maintained that the governor still supports the underlying policy. “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,” the spokesperson said.
Translated from Albany, the tax is ours when it is popular. The rollout is Mamdani’s when it winds up before a judge.
