A Staten Island judge on Tuesday ordered New York City to start over on the rollout of Mayor Zohran Mamdani’s pied-à-terre tax, ruling that the city’s Department of Finance trampled homeowners’ due process rights in deciding who owes the new levy.
The pied-à-terre tax, named for the French term for a part-time city residence, is an annual surcharge on New York City homes whose owners keep their primary residence elsewhere. It applies to one- to three-family homes the city values above $5 million and to co-ops and condos the city values above $1 million, a figure that typically runs far below their sale price. The tax took effect in July and remains state law.
The lawsuit, brought by three homeowners who say the city wrongly flagged their primary residences, targeted only how the city administered it.
In his ruling, state Supreme Court Justice Wayne Ozzi, a Democrat, wrote that “homeowners are being substantially harmed and penalized needlessly” by the department’s approach, according to The Hill.
In July, the Department of Finance posted a tax roll online that listed the names and addresses of more than 900,000 homeowners, including many who fall outside the tax. The department also mailed roughly 17,000 notices ordering recipients to file for an exemption or pay the surcharge. The ruling landed a week before the Oct. 6 exemption deadline, CNN reported.
Ozzi ordered the city to take down the roll and replace it with one limited to properties “actually subject to the surcharge.” He also voided the mailed notices, directing the city to send new ones only after making an individualized determination about each property.
“Sometimes city administrations screw up. This one’s a whopper,” said Randy Mastro, the homeowners’ attorney and a former first deputy mayor under Eric Adams, according to ABC7.
The Mamdani administration appealed Tuesday evening, invoking a stay that freezes Ozzi’s order and lets the city keep implementing the surcharge while the case proceeds. The city deployed the same maneuver in August, when Ozzi issued a temporary restraining order against the rollout.
Mamdani spokesperson Matt Rauschenbach called the decision “wrong” and cast the tax as “a basic principle of fairness.” The administration, he said, “will not back down” against the “ultra-wealthy” suing to avoid their share.
Mamdani and Gov. Kathy Hochul proposed the tax in April to help shrink the city’s budget deficit, and it passed as part of the state budget. Tax bills typically go out in November, leaving the city a narrow window if the ruling survives appeal.
The legal fight extends beyond the rollout. On Tuesday, Mastro filed a second suit, this one against New York State, on behalf of a separate group of homeowners and a co-op. The complaint argues the law discriminates against nonresidents, applies retroactively, and imposes unconstitutional burdens on homeowners.
A day earlier, former Commerce Secretary Wilbur Ross, his wife Hilary Geary Ross, and casino magnate Steve Wynn brought a similar challenge in Suffolk County Supreme Court, contending the tax singles out owners who have no vote over the lawmakers who imposed it.
