New York City's new surcharge on pricey second homes has hit a legal speed bump. A Staten Island judge on Monday temporarily halted enforcement of Mayor Zohran Mamdani's pied-à-terre tax and ordered the city to pull its public tax roll, after three homeowners sued over how the rollout was handled, CNN reports. The judge said the notices sent to roughly 17,000 property owners caused "irreparable harm" because they didn't spell out why recipients were flagged and warned they'd be taxed if they didn't seek an exemption.
The lawsuit doesn't attack the tax itself—which targets non-primary residences worth at least $5 million, and some condos and co-ops starting at $1 million—but focuses on alleged mislabeled homes that served as primary residences, and the disclosure of data including addresses and property values on some 900,000 properties. A hearing is set for Aug. 31. Mamdani said Monday that he would "vigorously defend" the tax in court, NY1 reports. Matt Rauschenbach, a spokesperson for the mayor, said the city's Law Department would appeal the ruling immediately and the city would continue with implementation.
When Mamdani and New York Gov. Kathy Hochul announced the tax in April, they said it would raise $500 million, the Guardian reports. On X, the mayor posted a video filmed outside the building where hedge fund manager Ken Griffin owns a $238 million penthouse. The tax is "specifically designed for the richest of the rich, those who store their wealth in New York City real estate but don't actually live here," Mamdani said. "But even so they are able to reap the huge financial rewards of owning property in, dare I say, the greatest city in the world." Critics argue that the tax could cause wealthy residents to leave the city, though Griffin has apparently backed down from a threat to cancel a $6 billion New York City project and focus on Miami instead.
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