Judge Pauses Mamdani's Pied-a-Terre Tax on Second Homes
A state judge temporarily blocked New York City's surcharge on high-value second homes after homeowners sued, and the mayor's office said it will appeal immediately.
A New York state judge has temporarily blocked Mayor Zohran Mamdani's pied-a-terre tax, an emergency pause that halts the city's rollout of a surcharge on high-value second homes.
The tax would apply to people who own, but do not live full-time in, any house worth more than $5 million, or a condominium or cooperative unit worth at least $1 million.
The pause, issued Monday and reported by the Wall Street Journal, followed a lawsuit filed Friday by a group of homeowners against the mayor and the city's finance director. The plaintiffs allege the city wrongly flagged their homes as potentially subject to the surcharge even though the properties are their primary residences.
"The city has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the surcharge," the complaint reads.
The order bars the city from sending any additional letters notifying homeowners of their potential tax liability and requires it to take down a public list of properties. The city had published a tax roll of about 960,000 owners who could be subject to the tax and sent notices to 17,000 addresses.
When Mamdani and Gov. Kathy Hochul announced the tax in April, they said it was expected to generate $500 million a year. Critics accuse the democratic socialist mayor of targeting the wealthy, while supporters see it as a way to raise revenue from affluent property owners in a city struggling with high living costs.
Business leaders, Republicans and some moderate Democrats have warned that new taxes on wealthy people who keep apartments and townhouses in New York without calling the city home will push them to leave altogether. The measure comes as Democrats work to answer voter concerns about affordability ahead of this year's midterm elections.
Matt Rauschenbach, a spokesperson for Mamdani, criticized the ruling in a statement to the Guardian and said the mayor's office would appeal.
"We disagree with today's ruling, but we are confident in both the pied-a-terre surcharge and the City's ability to implement it fairly and effectively," he said. "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 Law Department will appeal the ruling immediately which will stay the order, and the City will continue with the pied-a-terre's implementation."
This article was produced with the assistance of artificial intelligence (AI), in accordance with our editorial policy.
