A Staten Island judge has ordered New York City to cancel roughly 17,000 tax notices and start over on Mayor Zohran Mamdani’s new second-home tax, ruling the city’s method broke state law by making homeowners prove they didn’t owe the tax instead of the city proving they did. The judge also ordered the city to take down a public list of more than 900,000 properties that showed owners’ names.
Story Snapshot
- On Tuesday, September 29, State Supreme Court Justice Wayne Ozzi blocked the city’s rollout of the pied-à-terre tax and ordered the notices redone.
- The city must make a property-by-property decision before mailing any new notice.
- The public list of more than 900,000 properties must come down from the city’s website.
- The ruling does not strike down the tax itself, only the way the city rolled it out.
- The Mamdani administration has appealed and says it will keep working on the tax while the appeal moves forward.
Judge Orders a Full Restart of the Notice Process
Justice Ozzi, who sits in Richmond County on Staten Island, ruled that the city’s Department of Finance must cancel its notices and begin again. “Homeowners are being substantially harmed and penalized needlessly by D.O.F.’s method of implementing the tax law,” Ozzi said in his ruling. The order requires the city to make an individual determination for each property before sending any new notice.
The ruling means the city cannot simply flag a home as a likely second residence and demand the owner prove otherwise. The city has to do that work first. Each new notice must explain how the Department of Finance decided that the property owes the tax.
A 900,000-Home List Gets Cut Down
The city had posted a public list of more than 900,000 properties online, with owners’ names, addresses and home values. Ozzi ordered that list removed from the Department of Finance website. In its place, the city may publish a list showing only the properties actually subject to the tax.
The roughly 17,000 notices went out over the summer, telling owners they might owe the surcharge and giving them until October 6 to prove they qualified for an exemption. The judge ordered those notices canceled. One homeowner who sued received a notice even though his Manhattan home has been his “primary and only residence for more than a decade.”
What the Tax Actually Targets
A pied-à-terre (French for “foot on the ground”) is a second home kept in the city by someone whose main home is somewhere else. The pied-à-terre tax is an extra yearly charge on those homes. It covers one- to three-family homes worth more than $5 million and condos or co-ops worth $1 million or more, when they are not the owner’s main residence. Homes where the owner or immediate family lives as a main residence are exempt. The tax passed as part of the state budget earlier this year, Governor Kathy Hochul signed it, and it is expected to raise about $500 million a year.
Homeowners Say the Process, Not the Tax, Was the Problem
The three homeowners who sued did not argue the tax itself is illegal. Their lawyer, Randy Mastro, argued the city had to make individual findings before demanding payment. Instead, the city mailed notices first and left owners to prove they were exempt. That distinction matters because the tax survives this ruling, even though the city’s rollout does not.
The homeowners, from Staten Island and Manhattan, described confusion and unwanted scrutiny after their names landed on the public list. They raised privacy concerns and argued the city had no authority to publish it. That harm is what the judge pointed to when he found the city’s method penalized owners before any individual review took place.
City Vows to Fight the Ruling
City lawyers have appealed. City Hall says it will invoke a stay, a legal pause on the judge’s order, so it can keep working on the tax while the appeal moves forward. The homeowners’ lawyers dispute that the appeal pauses the ruling. “The ultra-wealthy are fighting in court to avoid paying their fair share,” the mayor’s office said, adding, “we will not back down.”
For now, the ruling stands as a clear rebuke of how the city handled notice and verification, while the tax itself stays on the books. Homeowners who received the original notices will wait for new, individual notices before any new deadline applies to them.
Sources:
lavocedinewyork.com, politico.com, cnn.com, fortune.com, mpamag.com, nbcnewyork.com, cbsnews.com, businessinsider.com, fox5ny.com
