Judge pauses Mamdani’s pied-à-terre tax rollout after homeowners sue; NYC plans appeal
By SCN News Desk
NEW YORK, Aug. 10 (SCN NEWS) — A New York state judge temporarily blocked New York City’s rollout of Mayor Zohran Mamdani’s pied-à-terre tax on Monday, handing a group of homeowners an early court victory in a dispute over how the city identified properties potentially subject to the new surcharge.
Staten Island Supreme Court Justice Wayne Ozzi issued a temporary restraining order halting further action tied to notices already sent by the city’s Department of Finance. A further court hearing is scheduled for Aug. 31.
The ruling does not settle the broader legality of the tax. Instead, the homeowners’ lawsuit challenges the way the city has implemented it, including allegations that residents whose homes are actually their primary residences were incorrectly swept into the process.
New York City said it would appeal.
“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,” a spokesperson for Mamdani said following the decision.
Thousands received notices
The surcharge applies to certain high-value properties that are not used as the owner's primary residence.
The city said last month that the Department of Finance had identified approximately 17,000 properties that could potentially be subject to the surcharge and sent their owners notices explaining the new requirements.
Under the city's rules, the tax generally targets non-primary one-, two- and three-family homes with assessed market values of at least $5 million, while different thresholds apply to condominium and cooperative units.
The administration had extended the deadline for property owners to seek exemptions until Sept. 18, giving residents additional time to establish that a property is their primary home or otherwise exempt.
Homeowners challenge rollout
The lawsuit was filed by homeowners who say the city improperly shifted responsibility onto residents to prove that they should not be taxed.
Their challenge focuses heavily on the Department of Finance's implementation process rather than asking the court at this stage to invalidate the surcharge itself.
The dispute intensified after the city published a property roll containing roughly 960,000 properties, far more than the approximately 17,000 addresses that received notices.
The judge's temporary order requires the city to remove that published roll and stops officials from taking further action based on the notices while the court considers the challenge.
Mamdani administration defends tax
Mamdani has defended the surcharge as a way to raise revenue from expensive properties maintained as secondary residences rather than primary homes.
Before Monday's ruling, the mayor said the purpose of the review process was to ensure the tax ultimately applied only to qualifying second homes and emphasized that residents receiving notices had opportunities to challenge the city's assessment.
The administration estimates the measure could generate roughly $500 million annually, though the final revenue would depend on how many properties ultimately qualify and how the policy survives legal challenges.
The temporary restraining order now creates the first significant judicial obstacle to implementing one of the Mamdani administration's most closely watched tax initiatives.
For affected homeowners, the immediate result is straightforward: the rollout is paused while the litigation continues.
For City Hall, the next battle will come through its planned appeal and the Aug. 31 hearing, where the court is expected to consider whether restrictions on implementation should remain in place.