A New York judge temporarily halted key parts of New York City‘s controversial rollout of its new pied-à-terre tax Monday—only for the city to appeal hours later.
Justice Wayne M. Ozzi of the state Supreme Court in Staten Island issued the order three days after three homeowners sued the city, arguing officials had improperly forced New Yorkers to prove they live in their own homes.
It’s a major legal setback for Zohran Mamdani’s administration, which had sold the tax as a win for the city’s budget and its beleaguered real estate market.
“The super wealthy, who can purchase properties and use them to store their wealth, to benefit from New York City’s real estate market, but not have to pay back into that same city that generates so much of that wealth in the way that they should,” Mamdani said in April announcing the policy.
And while New York Governor Kathy Hochul had originally supported the tax, she has distanced herself from the rollout. A spokeswoman for her office told the New York Times via statement, the “lawsuit about the administration of the tax is a matter for the city and the courts to work through.”
Her office stressed, however, that Hochul continues to support the underlying principle of taxing multimillion-dollar second homes.
Crucially, neither the homeowners’ lawsuit nor Ozzi’s order strikes down the tax itself.
What exactly did the judge block?
At the heart of the complaint is how the city identified the properties and homeowners it believes could be subject to the new second-home tax, which applies to New York City second homes worth $5 million or more.
“The city has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the surcharge,” the complaint reads.
The lawsuit followed both the mailing of roughly 17,000 notices to property owners and the publication of a supplemental roll containing information on roughly 960,000 residential properties, even though the city later acknowledged that the vast majority would not owe the surcharge.
The ruling deals a major blow to Mamdani’s “tax the rich” agenda. (NYC Mayor’s Office )
Ozzi granted the homeowners emergency relief, finding they had shown irreparable harm and that the city’s actions relating to the Supplemental Roll were “arbitrary, capricious, an abuse of discretion, in excess of legal jurisdiction, in violation of lawful procedure.”
His order bars the city from continuing to publish or otherwise allow public access to the Supplemental Roll and from taking further action based on either the roll or the notices already mailed to property owners.
But most importantly for New York City homeowners, it also stops the city from “enforcing any deadline set forth in the Mailed Notices,” including the original Aug. 21 deadline that the administration later extended to Sept. 18.
Why homeowners sued
In the complaint, Rachel O’Brien says she has lived in her Staten Island home since 2020, while Carmine Morano says he has lived in his Staten Island home for roughly 32 years. Both say the properties are their primary residences, yet their names, addresses, and property values appeared on the city’s supplemental roll.
Simon Hedley, meanwhile, says he has lived in his Manhattan home for more than 15 years and owned it for more than a decade. He says it is the address listed on his tax returns and other official documents, yet he received a notice warning that he “may be subject” to the surcharge unless he submitted proof that the property was his primary residence. His property also appeared on the supplemental roll.
The homeowners aren’t challenging the tax itself. They sued over how the city determined who might owe it, arguing that officials improperly shifted the burden onto homeowners to prove their properties were primary residences instead of first making that determination using information already available to the city.
What happens next
Late Monday, the Mamdani administration filed a notice seeking to appeal Ozzi’s order. Because the city is a municipal appellant, that filing stays enforcement of the executory portions of the order while the appeal proceeds.
And so the city remains in a holding pattern: Ozzi’s TRO remains on the books, but its restrictions are not currently stopping the city from continuing the rollout. The administration says it will do exactly that.
In the meantime, Ozzi has ordered the city to return to court on Aug. 31. What happens next will determine whether the city can keep using the existing process—or whether it must fundamentally change how it identifies homeowners subject to the tax before collecting it.