A state judge on Monday issued a temporary restraining order blocking New York City Mayor Zohran Mamdani’s pied-à-terre tax, halting its implementation while a lawsuit against the surcharge proceeds.
The State Supreme Court judge in Staten Island, Wayne Ozzi, granted the order after homeowners filed suit, arguing the city improperly identified their primary residences as subject to the tax. The lawsuit, filed on August 7, claims the mailed notices to 17,000 residents did not constitute proper notice under state tax law.
City responds with appeal
The city’s Law Department immediately filed an appeal to stay the judge’s order, asserting confidence in the tax’s legality and implementation. A spokesman for Mayor Mamdani’s office stated, “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.”
The tax, which targets second homes worth over $5 million and co-ops/condos over $1 million, was projected to generate $500 million annually for the city. Rates range from 0.8% to 1.3% for homes and 4% to 6.5% for co-ops/condos.
Homeowners cite legal burden
The lawsuit argues that recipients of the notices—despite living in their homes as primary residences—must now prove their occupancy to the city’s satisfaction, calling the process an “illegal burden.” Plaintiffs referenced analysis from former NYC Department of Finance commissioner Martha Stark, who estimated only about 24,000 properties meet the tax’s market value thresholds, with most being primary residences.
The next hearing is scheduled for August 31.
Background on the tax
Mayor Mamdani, who campaigned on taxing the wealthy, described the surcharge as targeting “the richest of the rich.” The tax applies to non-primary residences, including second homes and investment properties. The city had sent notices to approximately 17,000 residents ahead of the rollout, which the judge criticized as failing to meet legislative intent.