An appellate judge in New York on Thursday lifted a temporary restraining order that had briefly halted the rollout of the city’s new pied-à-terre tax, allowing the surcharge process to resume while a legal challenge proceeds.
The New York State Appellate Division granted the city’s motion to stay the order issued Monday by Staten Island Judge Wayne Ozzi, who had temporarily blocked the tax’s implementation. The city had filed an appeal seeking to overturn Ozzi’s decision, triggering an automatic pause in enforcement.
The lawsuit, filed by three city residents, challenges the administrative rollout of the tax—not the policy itself. The plaintiffs argue that the city improperly distributed a list of thousands of homeowners and sent notices to 17,000 individuals, informing them they may owe the new surcharge. The notices require recipients to prove their primary residency to avoid the tax.
Mayor Zohran Mamdani’s administration has defended the tax as a necessary revenue measure targeting high-value second homes. The city’s legal filing argued that Ozzi’s order threatened to derail a time-sensitive implementation, noting that the surcharge was designed to address housing affordability pressures in New York City.
The legal challenge centers on procedural concerns rather than the tax’s constitutionality. The plaintiffs’ attorney, Randy Mastro, criticized the city’s handling of the rollout, calling the notices “blatantly illegal” and accusing the administration of “harassing” homeowners. Mastro stated that the city failed to verify residency before issuing notices, placing an unfair burden on permanent residents to disprove their tax liability.
The appeals court’s decision allows the city to proceed with its appeal while the temporary restraining order remains stayed. The next court hearing is scheduled in 18 days, where the legality of the notices and the tax’s enforcement will be further examined. The pied-à-terre tax, a hallmark policy of Mamdani’s administration, remains in effect pending the outcome of the legal proceedings.