Mayor Zohran Mamdani's pied-à-terre tax on luxury 2nd homes put on hold by judge

A Staten Island judge Monday temporarily blocked New York City and the state from enforcing a proposed pied-à-terre tax on luxury second homes in the city.

Richmond County Supreme Court Judge Wayne Ozzi granted the order blocking Mayor Zohran Mamdani and the city Department of Finance, temporarily halting a cornerstone of Mamdani’s agenda to tax the city’s wealthy residents who own property that is not their primary residence.

The pied-à-terre tax was also included in Gov. Kathy Hochul’s state budget and approved by the state legislature in May. The law allows the city to impose the tax "on non-primary residences" for homes worth at least $5 million and co-ops and condos worth at least $1 million, according to a lawsuit challenging the legislation

Hochul said the tax was expected to generate $500 million in annual revenue for the city and state.

The case was filed by Randy Mastro, former deputy mayor under Mayor Eric Adams, on behalf of Staten Island residents Rachel O’Brien and Carmine Morano, relatives of Staten Island Councilman Frank Morano, and a third plaintiff.

O’Brien and Morano said they received notices at their primary homes on Staten Island, where they have lived for six and 32 years, respectively. They received notices "related to the annual non-primary residence property surcharge," according to their lawsuit.

Another plaintiff in the case, Simon Hedley, said he received a tax notice at his primary residence in Manhattan, where he said he has lived for 15 years, according to the lawsuit.

The judge granted the emergency order and set an Aug. 31 hearing to review the proposed tax. In his order, Ozzi cited the city’s rollout and publishing "a list of names, addresses and property values of more than 900,000 New York City homeowners."

City and state officials pushed back against the order Monday, vowing to proceed with the planned pied-à-terre tax, and would file an appeal to stay the judge’s order.

"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," mayoral spokesperson Matt Rauschenbach said in a statement. "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 temporary restraining order said the city’s mailed notices of residences "unlawfully purport to place upon homeowners the burden of proving" they are not subject to the pied-à-terre tax. The mailed notices listed a deadline of Aug. 21 to respond to the ci ty, which was extended to Sept. 18. The order also stops the city from posting homeowner information on the city’s Department of Finance website, according to the ruling.

"We are confident in our position. And that is a confidence coming from both the legality of the city's actions as well as the importance of a surcharge on secondary homes worth more than $5 million," Mamdani said Monday. "A surcharge that will help fund safer streets, that will help fund stronger schools, and it will help fund the city that New Yorkers deserve."

Hochul told reporters Monday that "the law is intact" but the judge’s ruling only addressed the city’s rollout of properties listed.

"While this lawsuit about the administration of the tax is a matter for the city and the courts to work through, the Governor continues to believe that people who can afford a multimillion-dollar second home in New York City can afford to pay their fair share." Hochul spokesperson Jen Goodman said in an email.

Newsday's Matthew Chayes contributed to this story.

By John Asbury

john.asbury@newsday.comJohnAsbury

John Asbury is a breaking news and general assignment reporter. He has been with Newsday since 2014 and previously worked at The Press-Enterprise in Riverside, California.