Judge Blocks “Pied-à-Terre” Tax but Appeals Court Judge Allows Rollout to Continue

A judge issued a temporary restraining order to Mayor Zohran Mamdani’s “pied-à-terre” tax after a group of angry homeowners filed a lawsuit against the new tax on second homes worth more than $5 million or co-ops and condos worth more than $1 million.

But then an appeals court judge ruled that the rollout can continue while the legal battle plays out. The next hearing is slated for Aug. 31.

Staten Island Supreme Court Justice Wayne Ozzi issued the temporary restraining on Aug. 10.

The Mamdani administration quickly appealed the ruling and an appeals court judge on Aug. 13 said the rollout can continue while the full appeals court decides its fate.

“The City Surcharge on Property That Does Not Serve as a Primary Residence” state law, colloquially known as “pied-à-terre” was introduced by Mamdani alongside NY Governor Kathy Hochul in April.

Hochul in a statement defended the law. “While this lawsuit about the administration of the tax is a matter for the city and the courts to work through, the governor continues to believe that people who can afford a multi-million dollar second home in New York City can afford to pay their fair share.”

The tax only applies if the property is not the owner’s primary residence. For the tax years 2026-27 and 2027-28, the tax surcharges range from 0.8 percent to 6.5 percent, depending on the property’s type and value.

The new tax has been the center of controversy since its introduction with opponents saying it will force wealthy residents to flee the city.

President Donald Trump, who once lived in Trump Tower but has moved his permanent residence to his Mar-a-Lago golf course in Florida in 2019 weighed on the controversy. In a post on Truth Social on Aug. 11, he said the new tax Truth Social post Tuesday that the surcharge on second homes “must be stopped, NOW!”

Mamdani, when he introduced the new law made a video standing outside the $238 million Manhattan penthouse home of billionaire hedge fund boss Ken Griffin.

“When I ran for mayor, I said I was going to tax the rich,” Mamdani said in the video released in April in which he pointed to the building where Griffin had his penthouse apartment. “I’m thrilled to announce we secured a pied a terre tax,” he said, “the first in NYC history.”

Griffin called the video “creepy and weird.” He vowed he’d move his business out of the city, although he is a partner with the developer Vornado in a tower that is being erected at 340 Park Ave. and his Citadel hedge fund is the anchor tenant.

Some have complained that condos and co-ops worth $1 million or more, which are also subject to the new tax are not really “luxury” pads at all in the supercharged Manhattan real estate market.

“I’m puzzled that Mayor Mamdani calls this a surcharge on $5 million dollar luxury pied a terre properties—when the vast majority of surcharge assessments are being levied co-op and condo owners of properties valued at $1million or more,” said Gail Gregg, an UWS co-op owner. “Most owners of $1 million apartments in NYC today are unlikely to be millionaires or billionaires.”

Others also blasted the public tax roll that was released in July because many residents who claim long time permanent residences in the city said their homes were mistakenly listed. The Staten Island judge ordered that the tax roll be taken down.

UWS City Council Member Gale Brewer said her long time Manhattan home was on the initial list.

Chelsea resident Simon Hedley, who was one of the people who filed the lawsuit, was also on the list initially. Rachel O’Brien and Carmine Morano, who are respectively the wife and father of City Council member Frank Morano, were also among the plaintiffs who were included on the list released in July. The lawsuit contends the list “created mass confusion” among homeowners.

The city said it has received 3,100 notices objecting to inclusion on the list of 17,000 people who were listed as tax targets.

The judge ordered the administration to take down the public list of potential property owners.

“We always know that with any new tax, there are more questions than there are answers,” Mamdani said. “We’re looking to make sure that every New Yorker that is potentially affected—again, we’re talking about 17,000 homeowners out of a city of 8 and a half million—have all the information that they need.”

Mamdani said homeowners who believe they had been incorrectly notified of the surcharge would be able to appeal to the Department of Finance by Sept. 18, an extension of a previous Aug. 21, or could appeal of the NYC tax commission until March 2027.

The Mamdani administration quickly filed an intention to appeal the ruling, staying the hold temporarily, the Mayor’s Office confirmed to Straus News.

“We are confident in our position,” Mamdani said. “And that is a confidence coming from both the legality of the City’s actions as well as the importance of a surcharge on secondary homes worth more than $5 million, a surcharge that will help fund safer streets, that will help fund stronger schools, and it will help fund the city that New Yorkers deserve.”

Randy Mastro, a former deputy mayor under Eric Adams and earlier under Rudy Giuliani, is representing the homeowners.

“There are few things more certain in New York City than death, taxes and Randy Mastro filing a lawsuit against this administration,” Mamdani said during a press conference on a non-related topic on Aug. 10. “So we look forward to vigorously defend our city’s position in court as we have done so with the previous lawsuits that he has filed and I’m sure with the lawsuits that he will continue to file in the months and years to come.”