Judge Wayne Ozzi of the state Supreme Court temporarily blocked Mayor Zohran Mamdani's second-home tax, halting the city from issuing new tax liability letters and ordering the removal of a public list of properties subject to the surcharge. The ruling follows a lawsuit filed by homeowners against the city.
The tax, known as the pied-à-terre surcharge, targets second homes in New York City. It applies to properties valued at more than $5 million, or condominium and cooperative units worth at least $1 million, when not used as a primary residence.
A group of homeowners filed suit last week, alleging the city misidentified their properties as subject to the surcharge. Their complaint said the city "arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the surcharge."
The city had published a tax roll listing about 960,000 owners as potentially subject to the tax and sent notices to 17,000 addresses informing them of their potential liability.
Mamdani, a democratic socialist, announced the surcharge in April alongside Gov. Kathy Hochul. They projected it would generate $500 million in annual revenue for the city.
Mamdani's office said the surcharge asks those owning second homes valued at $5 million or more to "contribute their fair share to the city they benefit from."
Critics, including prominent business leaders, Republicans and some moderate Democrats, warn the tax will drive wealthy residents out of New York City. They argue it targets people who maintain apartments or townhouses but do not use them as primary residences.
The legal challenge arrives as Democrats push new revenue measures ahead of this year's midterm elections while trying to address voter concerns about affordability.
Matt Rauschenbach, a spokesman for Mayor Mamdani, said the mayor's office plans to appeal the ruling immediately. "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. He added that the Law Department's appeal will stay the order, allowing the city to continue with implementation.
