A New York judge has temporarily blocked the implementation of Mayor Zohran Mamdani's controversial "pied-à-terre" tax, which targets high-value second homes, following a lawsuit filed by a group of homeowners. Staten Island Supreme Court Justice Wayne Ozzi issued a temporary restraining order Monday, halting any action on the luxury second home tax until a hearing scheduled for August 31.
The ruling came in response to a lawsuit filed by homeowners Rachel O’Brien, Carmine Morano, and Simon Hedley, who challenged the tax's rollout. Justice Ozzi criticized the city's decision to publish a list of over 900,000 potentially affected homeowners, stating that no law permitted or required the city to publicize such a list or to do so through an "irregular, mid-year publication." He also vacated the city's mailed notices, which warned homeowners they would be liable for the tax unless they filed an exemption, finding that the city should have conducted an "individualized statutorily-required initial determination" beforehand.
The judge barred city officials from taking further action on the 17,000 notices sent by the Department of Finance. The homeowners contend that the tax rollout caused "mass confusion" by ignoring state-provided data about eligibility and placing the burden on residents to prove their primary residence status within a tight deadline.
The "pied-à-terre" tax applies to three-family homes valued at $5 million or more, and condos and co-ops valued at $1 million or more, that are not primary residences. The tax rate increases progressively with home value, aiming to raise an estimated $500 million annually for the city.
City officials countered that thousands of challenges to the initial determination had already been received and that one plaintiff, Simon Hedley, had his appeal approved after submitting a tax return proving his Manhattan home is his primary residence. Lawyers for the city argued that a restraining order would impede the processing of these appeals and could delay tax bills.
However, Ozzi's ruling requires the city to remove the online list and prevents any action based on that list or the mailed notices until the August 31 hearing. Councilman Frank Morano praised the ruling, noting his father and wife were among the plaintiffs. "This fight is far from over," Morano posted on Facebook. "Today's ruling is temporary while the case continues, and we fully expect the City to keep fighting."
A spokesperson for Mayor Mamdani stated that the administration disagrees with the ruling but is confident in the tax's fairness and implementability. "The Law Department will appeal the ruling immediately, which will stay the order, and the city will continue with the pied-a-terre's implementation," the spokesperson said.
