A New York judge blocked Mayor Zohran Mamdani's pied-à-terre tax and ordered the city to pull down a massive list of nearly 960,000 properties, a win for homeowners who say the rollout was reckless from the start.
Staten Island Supreme Court Justice Wayne Ozzi issued a temporary restraining order Monday stopping New York City from moving forward with the surcharge while a lawsuit filed by three homeowners works its way through Richmond County Supreme Court. The order bars the city's Department of Finance from acting on roughly 17,000 notices already mailed to property owners and suspends a September 18 deadline that would have forced those owners to dispute the tax or seek exemptions. A hearing is set for August 31.
The tax, which took effect July 1, was Mamdani's signature revenue play, a surcharge on high-value properties not used as primary residences. One-, two-, and three-family homes valued at $5 million or more and condominiums or cooperative apartments worth at least $1 million fell under the new levy. The mayor promoted the surcharge as a way to squeeze revenue from wealthy New Yorkers who park money in city real estate without actually living there.
But the city's execution turned what Mamdani billed as a tax on "the richest of the rich" into a dragnet that swept up hundreds of thousands of ordinary homeowners who had no business being on the list at all.
The Department of Finance released a publicly available list last month containing information on roughly 960,000 residential properties. That list included names, addresses, and property values of more than 900,000 New York City homeowners, Fox News reported. The city published it all without first determining whether the properties actually qualified as non-primary residences, the very condition the surcharge was supposed to target.
Some homeowners flagged by the city said they had lived in their properties for years. They were not absentee investors storing wealth in Manhattan penthouses. They were residents who woke up one morning to discover their personal and financial information posted online and a tax notice in the mail for a levy that did not apply to them.
Plaintiffs Rachel O'Brien, Carmine Morano, and Simon Hedley filed suit on August 7 in Richmond County Supreme Court. Their attorney, Randy Mastro, told reporters the city bore the blame for a process that never should have touched the vast majority of people it reached.
"The city screwed this up... got it wrong... stop the train and make them do it over. The city is to bear the burden. They didn't do their homework."
Mastro's language was blunt, and Just The News noted the lawsuit challenged the tax's implementation, not its underlying legality. The homeowners did not argue the city lacked authority to impose a pied-à-terre surcharge. They argued the city botched the rollout so badly that it violated their rights in the process.
The legal complaint zeroed in on procedural failures. Plaintiffs alleged the city failed to conduct the individualized determinations required by law before mailing notices, the Washington Examiner reported. Instead of verifying which properties actually qualified, the Department of Finance cast a wide net and told homeowners to prove they deserved an exemption, flipping the burden of proof onto the very people the surcharge was not supposed to reach.
That distinction matters. A tax aimed at vacant luxury properties owned by the ultra-wealthy should not require a retired couple on Staten Island to hire a lawyer and file paperwork proving they live in their own home. Yet that is exactly the position the city's approach created for thousands of New Yorkers.
Judge Ozzi agreed the situation warranted immediate relief. His order requires the Department of Finance to take down the property list, halts all enforcement activity tied to the mailed notices, and freezes the September 18 deadline for as long as the restraining order remains in place.
After the ruling, Mastro said the court's decision vindicated the homeowners caught up in the mess.
"We are very gratified by the judge's decision, which has vindicated the rights of hundreds of thousands of New York City homeowners who were subjected to a process they never should have been a part of in the first place."
The Mamdani administration wasted no time signaling it would push back. Spokesman Matt Rauschenbach said the city plans to appeal the restraining order and seek to have it lifted before the August 31 hearing.
"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 added that the 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 New York City Law Department confirmed it intends to fight the order in court.
The administration's confidence sits uneasily next to the scale of the problem. The surcharge was projected to generate approximately $500 million in annual revenue, according to the Washington Examiner. But the city flagged roughly 960,000 properties for a tax that targets unoccupied luxury residences, a category that, by any reasonable estimate, represents a small fraction of that number. Sending 17,000 individual notices without first checking whether the recipients even qualified suggests the Department of Finance prioritized speed over accuracy.
Mamdani himself framed the tax in populist terms before the court stepped in.
"This pied-à-terre tax is specifically designed for the richest of the rich, those who store their wealth in New York City real estate, but who don't actually live here. But even so, they're able to reap the huge financial rewards owning property in, dare I say, the greatest city in the world."
The rhetoric aimed at billionaire absentee owners. The implementation landed on working families.
The fallout extended beyond City Hall. The New York Post reported that Governor Kathy Hochul distanced herself from the botched rollout, a notable move given that Albany enabled the surcharge in the first place. When even the governor wants daylight between herself and the city's tax enforcement, the administration has a credibility problem that no appeal brief can fix quickly.
New York City Councilwoman Inna Vernikov offered a sharper assessment. "This is Marxism in practice: consistently promising to better the lives of the middle class by punishing the wealthy," Vernikov said, according to the Washington Examiner.
Whether or not one accepts that characterization, the underlying complaint is hard to dismiss. A tax sold as a narrow levy on the ultra-rich produced a publicly searchable database of nearly a million homeowners' names, addresses, and property values. It generated thousands of notices sent to people who did not owe the surcharge. And it forced those people to scramble for exemptions under a tight deadline, all before a single eligibility determination had been made.
Judge Ozzi, himself a Democrat on the state's Supreme Court bench, the Washington Examiner noted, set the next hearing for August 31. At that point, the court will decide whether to extend the restraining order, modify it, or let the city resume enforcement. The Mamdani administration's appeal could accelerate that timeline, but the judge's willingness to halt the entire program suggests the city faces serious questions about how it carried out the law.
The lawsuit does not challenge the city's power to tax luxury second homes. It challenges whether the city followed its own rules when it did so. That is a narrower question, but it carries broad consequences. If the court finds the Department of Finance skipped required steps, the administration may have to rebuild the property roll from scratch, conducting the individualized reviews it should have done before publishing a single name.
For the roughly 960,000 homeowners whose information appeared on the city's list, the restraining order offers temporary relief. The list must come down. The notices are frozen. The deadline is paused. But the tax itself remains on the books, and the city has made clear it intends to collect.
The question is whether Mamdani's administration can execute a program competently enough to survive its own courtroom. So far, the record suggests otherwise.
When a government promises to tax only the rich and ends up dragging nearly a million ordinary homeowners into the process, the problem is not the court that stopped it, it is the city that thought nobody would notice.
