The decision comes after the city appealed Staten Island Supreme Court Judge Wayne Ozzi’s temporary block of the second home tax on Monday. Ozzi’s ruling was in response to a suit filed by a group of homeowners alleging the way the city began notifying homeowners of the tax created “mass confusion.” The homeowners are represented by Randy Mastro, the former First Deputy Mayor to Eric Adams, whose gained a reputation for suing the Mamdani administration.
The suit, filed by family members of Republican Council Member Frank Morano, argues that the city placed an unfair burden on the 17,000 property owners who received mailed notices telling them they may owe the new tax by leaving it up to them to prove whether they were eligible for an exemption, so they should have more time to challenge whether they are responsible for paying it.
It also argues that the city should not be allowed to keep a list of 900,000 properties and their owners up on its sites and social media, a publication the city has said is essentially a state-mandated tax roll.
The Appellate Division, Second Department, ruled Thursday that the city’s appeal of Ozzi’s order is stayed until the two parties meet in Ozzi’s courtroom Aug. 31 for a hearing over whether the tax rollout should be allowed to continue as the suit over it plays out in an order signed by Associate Justice Philip Hom.
Mastro, who had filed court papers arguing that Ozzi’s order shouldn’t be stayed by the city appealing it, said he disagreed with the city appealing in a way that circumvented Ozzi’s order and was “confident” his clients will win when they appear in court later this month.
“It is a shame that the City can’t own up to its own mistakes and admit that it has badly botched the rollout of this surcharge,” Mastro said in a statement. “Instead, the administration is doubling down, going to court to ensure that it can continue harassing and threatening New York City homeowners who clearly are permanent residents – something the City would know if it would only do its homework.”
A spokesperson for City Hall did not immediately respond to a request for comment on the ruling. The city’s held that appealing allows it to continue rolling out the tax and has said it will not pause its plans to do so. Legal experts have told amNewYork that they questioned the suit’s effectiveness and the strength of its claims.
Those who believe they received a letter in error notifying them they have to pay the tax have until Sept. 18 to tell the city they think they shouldn’t have to pay.
The surcharge itself applies to certain high-value New York City properties that are not used as qualifying primary residences. For one-, two- and three-family homes, the surcharge applies to properties valued by the city at $5 million or more, with rates ranging from 0.8% to 1.3% and condo and co-op units valued at $1 million or more may face rates of 4% to 6.5%.
Critically, the suit does not challenge the tax’s legality, only the way the city rolled it out, meaning the most it can do is delay its implementation. The city expects to collect roughly $500 million from the tax.