The suit<\/a> does not challenge the underlying tax law. Instead, it accuses the Mamdani administration<\/a> of failing to follow state notice requirements and setting off a \u201cpanic\u201d in late July by releasing a list of nearly 1 million properties that might be hit with pied-\u00e0-terre surcharge, then mailing about 17,000 notices to a smaller group of property owners.<\/p>\n The state court action seeks to have those notices declared \u201cnull and void.\u201d<\/p>\n \u201cThe mayor<\/a> wanted a headline, and he got one,\u201d attorney Randy Mastro, a former top aide to Eric Adams and Rudy Giuliani who is representing the group, told<\/a> Gothamist. \u201cThousands of people who owe nothing have been confused, exposed, and put to real expense so this administration could make a political point. That is not lawful notice.\u201d<\/p>\n The Independent has contacted the mayor\u2019s office<\/a> and New York City departments of law and finance for comment. <\/p>\n The lawsuit has ties to Mamdani\u2019s political rivals. <\/p>\n One of the plaintiffs is Rachel O\u2019Brien, who is married to Republican City Councilmember Frank Morano, whose father is another plaintiff. Mastro, meanwhile, served as first deputy mayor under Adams and as Giuliani\u2019s chief of staff.<\/p>\n The city has defended its approach to the tax, which applies to homes worth more than $5 million and co-ops and condos worth more than $1 million that are not used as primary residences.<\/p>\n It argues it was bound under state law to release the list of properties, and it has since given homeowners an extension of until September 18<\/a> to apply for an exemption. <\/p>\n New York will \u201cvigorously defend the city against this suit\u201d Mamdani spokesperson Matt Rauschenbach told The New York Times.<\/a><\/p>\n The pied-\u00e0-terre tax, passed in May, will bring in an estimated $500 million annually. The mayor argues the tax is necessary to strengthen the city\u2019s budget and expand social services.<\/p>\n Mamdani has pitched the tax as only impacting the \u201crichest of the rich,\u201d whose buildings are \u201csitting empty\u201d while their owners are \u201cable to reap the huge financial rewards\u201c of holding property in New York City. <\/p>\n \u201cThis is a fundamentally unfair system that hurts working New Yorkers,\u201d Mamdani, who ran on taxing the rich, said in April. \u201cNow, it\u2019s coming to an end.\u201d <\/p>\n The tax has faced criticism from wealthy New Yorkers since the beginning, though some experts argue that their claims the tax will set off capital flight are overblown.<\/p>\n \u201cI don\u2019t think a lot of the typical concerns about migration are concerns when it comes to the pied-\u00e0-terre tax,\u201d Emily Eisner, executive director and chief economist at the left-leaning Fiscal Policy Institute, told The Guardian<\/a>. \u201cI\u2019m not concerned about dampening real estate markets.\u201d<\/p>\n Mamdani angered figures across the business world in April by standing outside of Wall Street billionaire Ken Griffin\u2019s luxury building to promote the tax.<\/p>\n In the fallout, Griffin and his hedge fund threatened to pull out of planned skyscraper project, though the development is still moving forward with Griffin\u2019s Citadel as an anchor tenant<\/a>. <\/p>\n Mamdani\u2019s pied-\u00e0-terre tax is part of a larger wave of populist policies bubbling up from the Democratic party\u2019s left flank.<\/p>\n![\"New](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/08\/2287861269...jpeg\")
New Yorkers are suing Mayor Zohran Mamdani over the \u2018panic\u2019 created by his tax on luxury second homes (Getty)<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/us-ny\/wp-content\/uploads\/2026\/08\/2274171505...jpeg\")
The tax plan, which is expected to net $500 million annually, previously caused controversy when Mamdani filmed a video promoting it outside the home of Wall Street billionaire Ken Griffin, who threatened to pull his company Citadel out of a skyscraper project in Manhattan (AFP\/Getty)<\/p>\n