NEW YORK (BLOOMBERG) — The rollout of New York City Mayor Zohran Mamdani’s new pied-à-terre tax was temporarily blocked by a state court judge on Staten Island.
Justice Wayne Ozzi on Monday issued a restraining order against the city in a lawsuit filed last week by a group of homeowners. The judge barred any action to enforce the law pending further proceedings. He scheduled a hearing for Aug. 31.
The suing homeowners said the city had caused “mass confusion” with its controversial identification of thousands of properties that it says are potentially subject to the tax on second homes. According to the suit, the city’s request for wrongly identified homeowners to apply for exemptions illegally shifts its own responsibility to correctly identify taxable properties.
In a statement, Mamdani spokesman Matt Rauschenbach said the city would appeal Ozzi’s order immediately and seek its own order allowing the implementation of the pied-a-terre tax to continue.
“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,” Rauschenbach said. “This surcharge asks those who own second homes valued at $5 million or more to contribute their fair share to the city they benefit from.”
The levy, signed into law in May by Governor Kathy Hochul, targets single-family homes worth $5 million or more and apartments worth $1 million or more. Hochul’s office didn’t immediately respond to messages seeking comment on the decision.
Last month, the city’s Department of Finance posted an assessment roll online that “includes, but is not limited to, those properties that may be subject to the surcharge.” The document included the estimated market values of nearly 1 million residential properties, including hundreds of thousands that appeared to fall short of the threshold for the second-home levy.
The city additionally mailed 17,000 notices to property owners notifying them that they may be liable to pay the tax. Those owners were given until Sept. 18 to apply for exemptions.
The tax’s rollout quickly drew backlash from New Yorkers, including homeowners who said it included their longtime primary residences and City Council members who said they’d been caught off guard by the assessment roll’s publication. Roughly 2,000 people have completed applications seeking an exemption from the tax, the city’s Department of Finance said last week.
Ozzi’s order requires the city to take down the assessment roll and blocks Mamdani’s administration from taking any further action based on it or the mailed notices while the lawsuit continues.
Rent-Freeze Challenges
The suit was brought on behalf of three New York homeowners by lawyer Randy Mastro, a former deputy mayor. Last month, Mastro also filed a separate complaint on behalf of a group of New York City landlords who sued to void a rent freeze approved in June, arguing that Mamdani improperly influenced the Rent Guidelines Board’s vote and ignored evidence of rising operating costs for building owners.
Earlier on Monday, Mamdani noted Mastro’s role in suits challenging his policies.
“You know, there are few things more certain in New York City than death, taxes and Randy Mastro filing a lawsuit against this administration,” the mayor said at a press conference. “So we look forward to vigorously defend our city’s position in court as we have done so with the previous lawsuits that he has filed and I’m sure with the lawsuits that he will continue to file in the months and years to come.”
Mamdani said the surcharge will help fund safer streets, safer schools and “the city that New Yorkers deserve.”
The case is O’Brien v the City of New York, 85217/2026, New York State Supreme Court, Richmond County.
— With assistance from Michelle Kaske and Laura Nahmias
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