A Staten Island judge has temporarily blocked the hotly contested rollout of Mayor Zohran Mamdani’s so-called pied-à-terre tax that levies a surcharge on wealthy New Yorkers who have a second home in the city.
The decision comes in a suit filed Friday by homeowners — including members of Republican City Council Member Frank Morano’s family — who are arguing that the way Mamdani rolled out the pied-à-terre tax created “mass confusion” and therefore should be paused so second-home owners have more time than the current deadline of Sept. 18 to appeal the tax being levied on them and get their documents in order. They are represented by attorney Randy Mastro, formerly a first deputy mayor to Eric Adams.
On Monday, Staten Island Supreme Court Judge Wayne Ozzi agreed with Mastro’s clients, ruling the way the city notified 17,000 alleged double-home owners about the tax did “not constitute proper notice under tax law” and unlawfully put the burden of proving they shouldn’t be subject to the tax on homeowners. Those “suspected” of having a second home in the city received mailed notices that they may be on the hook for the tax, directing them to let the city know if they believed the city’s assumption was incorrect.
Ozzi also agreed with the argument advanced by Mastro’s clients that Mamdani’s controversial publicly posted online “database” of over 900,000 residential property and co-op unit records and their owners — which the administration has since said was not necessarily a list of properties that may be subject to the tax — wasn’t the right way to go about things.
“No law permitted or required the City to publish such a list of the names, addresses, and property values of more than 900,000 New York City homeowners, or to further publicize that list through an irregular, mid-year publication,” Ozzi wrote. “[The judgment] annuls and vacates [the] City’s mailed notices, and any determination that such mailed notices constitute proper notice under tax law.”
Ozzi added that the city should have conducted an “individualized statutorily-required initial determination” before issuing the mailed notices so as not to place the burden on the property owners to prove whether or not they should have to pay.
Mamdani’s office said it disagreed with the judge’s ruling and would be “immediately” appealing it, which will allow the city to “continue with the pied-à-terre’s implementation” as planned. A spokesperson added that the mayor was “confident” in the city’s pied-à- terre tax while taking the opportunity to take a jab at Mastro, who has gained a reputation for suing the new administration.
“Since leaving office, Mr. Mastro has already sued the city five times,” said Mamdani spokesperson Matt Rauschenbach. “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. 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.”
Ozzi set an Aug. 31 hearing where Mamdani’s Law Department will argue as to why the temporary order blocking the tax’s implementation should be nixed, and the city should be allowed to continue rolling out the tax as it sees fit.
Earlier today, when asked whether he had “any regrets” on the tax’s rollout at an unrelated press conference, Mamdani did not directly answer, saying he knew that “with any new tax, there are more questions than there are answers,” adding that his administration will “vigorously defend” itself against the suit.
Critically, the suit does not challenge the legality of the tax itself, only how it was rolled out. It will at most delay the tax’s implementation, which could still spell trouble for Mamdani’s plans, pushing back the date the city can expect to rake in roughly $500 million in revenue.
The tax applies to second residences when they’re condos valued at at least $1 million or single-family homes valued at at least $5 million. The tax progressively increases as the value of the home increases, topping out at 1.3% of a single-family home’s value when it’s worth over $25 million and 6.5% of a condo or co-op’s value when it’s worth over $5 million.
It’s widely seen as aligning with Mamdani’s campaign promise to tax the rich, a key demand of the Democratic Socialists of America and a win for the mayor, who was able to convince Gov. Kathy Hochul to pass the tax in this year’s state budget as a new revenue source for the city budget. Mamdani has previously defended posting the roll of 900,000 properties online, saying it was simply part of the city’s state-mandated routine tax roll publication.
The administration previously extended the deadline for those who received a mailed notice to appeal the tax from Aug. 21 to Sept. 18, with Mamdani saying he wanted to ensure property owners had enough time to engage with the city.
A property may be exempt if it is the primary residence of its owner, certain immediate family members, the sole beneficiary of a trust or people who collectively hold a majority stake in the entity that owns it. And, units rented or sublet under an arm’s-length lease of at least one year may also qualify. The tax is expected to be paid on June tax bills next year.
Additional reporting by Adam Daly