New York Judge Rules Against City's Pied-à-Terre Tax Rollout

Staten Island Supreme Court Justice Wayne Ozzi has ruled that New York City must scrap and restart the implementation of its pied-à-terre tax. The decision on Tuesday found the city's administration acted in an "arbitrary" and "capricious" manner by mailing tax notices to New Yorkers not subject to the levy on luxury second homes.

The ruling is a significant setback for one of Mayor Zohran Mamdani's signature policies. The city Department of Finance must now cancel all previously issued notices and begin the process anew, sending individual notifications after reassessing who is liable for the tax.

The pied-à-terre tax, approved by Governor Kathy Hochul and the state Legislature, targets 1-to-3 family homes valued at $5 million or more and co-ops and condominiums worth at least $1 million that are not primary residences.

Mastro, who filed the lawsuit on behalf of Staten Island homeowners, praised the decision. "We're gratified that the court has recognized we were right all along," Mastro stated. "The fact is that this administration failed to follow state law when it burdened New York City homeowners with proving they live in their own homes or be on the hook for paying a new surcharge."

Mastro added, "Now the administration must go back and do what it should have done from the start: use all the information at its disposal to make an individualized ‘initial determination’ about who truly owes this surcharge before demanding that they pay it."

The city administration had not immediately commented on the ruling. The administration has stated that the tax is projected to generate over $500 million annually, intended to fund public services such as schools and libraries.

The legal challenge has gained notable opponents, including casino mogul Steve Wynn and former Commerce Secretary Wilbur Ross, who have joined the fight to halt the tax. Wynn, whose primary residence is in Palm Beach, Florida, filed a separate lawsuit in Suffolk County, asserting the tax is "unconstitutional." According to his lawsuit, Wynn received a notice in July indicating he owed a $183,000 surcharge on his Manhattan property.