A Staten Island judge called the rollout "arbitrary" and "capricious" after more than 1,000 New Yorkers who don’t owe the tax got bills. All 17,000 notices must be cancelled and reissued. The city plans to appeal, and two new lawsuits challenge the tax itself.
A state judge on Tuesday threw out every notice New York City sent under its new pied-à-terre tax and ordered the Department of Finance to start over. It is a significant setback for one of Mayor Zohran Mamdani’s signature policies.
Staten Island Supreme Court Justice Wayne Ozzi found the city acted in an "arbitrary" and "capricious" way when it mailed tax notices to more than 1,000 homeowners who were never subject to the levy. Those owners, he wrote, were "substantially harmed and penalized needlessly" by being forced to prove they qualified for an exemption.
Under the ruling, all roughly 17,000 notices must be cancelled, and the city must reissue them based on an individual assessment of each property.
What the tax covers
The surcharge was approved by Gov. Kathy Hochul and the state Legislature. It applies to unoccupied, non-primary residences: one- to three-family homes worth at least $5 million, and co-ops and condos valued at $1 million or more. The city says it will bring in more than $500 million a year for schools, libraries and other services.
Attorney Randy Mastro, who brought the case on behalf of Staten Island homeowners, said the administration had ignored state law by making owners prove they live in their own homes. The city, he said, now has to make an individualized "initial determination" before demanding payment. The Mamdani administration said it will appeal.
Wynn and Ross join the fight
The ruling lands as the legal challenges multiply. On Monday, casino mogul Steve Wynn and former Commerce Secretary Wilbur Ross, both of whom live primarily in Palm Beach, Florida, sued in Suffolk County, arguing the tax is unconstitutional. Wynn says he was billed a $183,000 surcharge on his Manhattan property in July. Ross says his bill was $83,000.
Mastro also filed a separate constitutional challenge in Suffolk County on Tuesday for another group of homeowners and a Manhattan co-op corporation.
Hochul was unmoved by the billionaires’ complaints. Writing on X, she said that when Wynn and Ross present themselves as sympathetic figures over taxes on their second, third, fourth or fifth homes, "they make the case for the pied-à-terre tax better than we ever could."
Reporting in this story is based on coverage first published by the New York Post. The photograph is a stock file image.
