A Staten Island judge has temporarily halted New York City’s rollout of its new pied-à-terre tax after homeowners challenged the way the city identified properties potentially subject to the surcharge. The court order pauses key parts of the implementation while the lawsuit moves forward, adding another layer of controversy to a tax already facing criticism over its rollout.
NEW YORK — A Staten Island judge on Monday temporarily blocked New York City’s rollout of Mayor Zohran Mamdani’s pied-à-terre tax, granting a temporary restraining order while a lawsuit brought by three homeowners moves forward.
Staten Island Supreme Court Justice Wayne Ozzi ordered the city and its Department of Finance to halt key parts of the implementation, including use of the newly published tax roll and further action based on notices sent to thousands of property owners.
The ruling came after homeowners argued that the city’s rollout improperly placed the burden on residents to prove that their properties are primary residences rather than second homes.
Who Sued, and Why
The lawsuit was filed by homeowners Simon Hedley, Rachel O’Brien and Carmine Morano against Mayor Mamdani and city finance officials in New York State Supreme Court in Richmond County.
The plaintiffs say their properties were incorrectly identified as potentially subject to the surcharge even though they serve as primary residences.
Importantly, the lawsuit does not primarily challenge the legality of the pied-à-terre tax itself. Instead, it targets the way New York City implemented it and identified homeowners who might owe the surcharge.
The Department of Finance created a preliminary tax roll containing roughly 960,000 properties, while approximately 17,000 homeowners received notices informing them that their properties might be subject to the new surcharge.
The plaintiffs argue that the process improperly forced homeowners to prove their residency rather than requiring the city to first establish that their properties qualified as non-primary residences.
A Political Twist
The homeowners are represented by attorney Randy Mastro, a former New York City first deputy mayor and a prominent critic of the Mamdani administration.
Mastro has sharply criticized the rollout, arguing that the city created unnecessary confusion for homeowners.
The legal battle therefore adds a political dimension to what is already becoming one of the more controversial tax initiatives of Mamdani’s administration.
What Is the Pied-à-Terre Tax?
The new surcharge targets certain high-value New York City properties that are not used as primary residences.
According to the New York City Department of Finance, it applies to:
- one-, two- and three-family homes valued by the Department of Finance at $5 million or more; and
- condominium and cooperative units valued by the Department of Finance at $1 million or more.
The surcharge generally does not apply when the property is used as a primary residence by the owner, a tenant, an immediate family member of the owner, or certain individuals with a majority interest in an entity that owns the property.
The tax was developed as part of an effort by city and state leaders to generate additional revenue from high-value second homes. Earlier this year, city officials estimated that the measure could raise hundreds of millions of dollars annually, although estimates vary depending on how the tax is implemented.
A Rollout Already Facing Backlash
The controversy began after the Department of Finance started mailing notices in July to property owners who might be subject to the surcharge.
The Mamdani administration described the mailing as the first step in implementing the new tax and launched a dedicated city webpage to help property owners navigate the process.
But some longtime residents said they received notices even though the properties in question were their primary homes.
The dispute quickly grew beyond the tax itself, raising questions about how the city compiled its property list, whether homeowners were given adequate information and how much responsibility residents should bear for proving that they qualify for an exemption.
What Happens Next
Monday’s ruling does not strike down the pied-à-terre tax.
Instead, it temporarily stops important parts of the city’s rollout while the court considers the homeowners’ challenge.
That distinction could become crucial as the case proceeds: the immediate legal fight is not simply about whether New York City can impose a surcharge on luxury second homes, but whether the city followed the proper process when deciding who might have to pay it.
For Mayor Mamdani, the case also creates an early test of one of his administration’s most closely watched tax policies — and of how aggressively the city can move to implement it when thousands of property owners could be affected.
Sources: New York City Department of Finance; New York City Mayor’s Office; CNN X;