Mayor Zohran Mamdani’s office filed an appeal Tuesday after a Staten Island judge barred notices from being sent to homeowners affected by the pied-à-terre tax.
The city invoked the “auto stay” provision, which under New York law allows implementation of the tax on second homes worth more than $5 million to continue while the ruling is held in abeyance.
The appeal effectively puts Judge Wayne Ozzi’s ruling on hold as the city presses forward with its rollout of the historic surcharge.
Ozzi had ordered the city to replace its property roll, which includes all homes potentially subject to the tax, with a more limited roll reflecting only those properties actually subject to the surcharge.
He also ordered that all previously mailed notices be canceled, with new notices to be sent only after an individualized initial determination can be made for each property.
The NYC Department of Finance had already sent 17,000 notices to homeowners during the program’s rollout, instructing them on how to appeal if they wished to be exempted from the tax.
The department also published a list of properties and owners subject to the surcharge, a move that drew sharp criticism from the court.
Ozzi ruled that the mailed notices “irresponsibly and unnecessarily caused homeowners to expend time and money” and further “lacked any real guidance as to the proof required.”
Ozzi had previously issued a temporary restraining order in August to halt the tax’s rollout, but the city appealed that decision as well, preventing it from taking effect.
The current lawsuit does not challenge the legality of the tax itself, but it represents another significant setback for the rollout of the measure signed into law earlier this year.
Mamdani created the tax alongside New York Gov. Kathy Hochul in April, arguing it would provide the city with long-term solutions to its budget deficit.
The tax applies as an annual surcharge on one- to three-family homes, condominiums, and co-ops owned by individuals who maintain a separate primary residence elsewhere.
While Mamdani and Hochul project the tax would generate $500 million in additional annual revenue, an independent analysis tells a different story.
A 2019 analysis of a similar proposal conducted by the city’s independent budget office found that such a tax would generate closer to $232 million per year.
The pied-à-terre tax has already been the subject of a separate lawsuit, in which the Mamdani administration also invoked the auto stay provision to maintain momentum behind the policy.
