New surcharge

Judge's ruling leaves New York City's pied-à-terre tax in legal limbo

The new surcharge applies to second homes worth more than $5 million.

By Janaki Chadha

A Staten Island judge issued a temporary restraining order Monday pausing Mayor Zohran Mamdani’s rollout of New York City’s new tax on second homes worth over $5 million.

But the pause was short-lived: the city quickly moved to appeal, automatically halting the order until it goes before a higher court.

The ruling from Judge Wayne Ozzi came in response to a lawsuit filed Friday by New York City homeowners challenging City Hall’s administration of the surcharge. The plaintiffs, represented by former First Deputy Mayor Randy Mastro, took specific issue with the publication of more than 900,000 properties that could fall under the pied-à-terre tax, and letters to some 17,000 property owners the city suspects are actually subject to it.

Under Ozzi’s order, the city would have had to take down the public, 900,000-home list, and be prevented for the time being from taking further action based on that list or on the notices mailed to the smaller group of property owners. It would have also blocked the city from enforcing a Sept. 18 deadline for seeking an exemption while the order is in effect.

A hearing before Ozzi is scheduled for Aug. 31. The question of whether the temporary restraining order should remain on hold will separately come before an appeals judge.

The tax applies only to people who own second homes in New York City worth more than $5 million. But some homeowners say they’ve received notices from the city despite being full-time New Yorkers.

The lawsuit alleges the city “has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge.”

Mastro has been a frequent antagonist of the Mamdani administration. He filed a lawsuit earlier this summer challenging the recently approved rent freeze on the city’s roughly 1 million rent-regulated apartments, a key Mamdani campaign pledge. And he was separately at odds with Mamdani over efforts to amend the city charter.

Mamdani told reporters on Monday his administration will “vigorously defend” the rollout in court, while referencing Mastro’s involvement.

“There are a few things more certain in New York City than death, taxes and Randy Mastro filing a lawsuit against this administration,” Mamdani quipped.

“We are confident in our position,” Mamdani said. “And that is a confidence coming from both the legality of the city’s actions as well as the importance of a surcharge on secondary homes worth more than $5 million, a surcharge that will help fund safer streets, that will help fund stronger schools, and it will help fund the city that New Yorkers deserve.”