New York City Mayor Zohran Mamdani’s high-profile push to tax luxury second homes has hit a major legal roadblock, after a Staten Island judge temporarily blocked the city’s rollout following a lawsuit from homeowners who say they were wrongly swept into the program.
The controversial pied-à-terre surcharge targets non-primary residences in New York City, including single-family homes valued at $5 million or more and condominiums or co-ops valued at $1 million or more. The measure became law earlier this year and took effect July 1 as part of efforts to raise additional revenue from owners of expensive second homes.
But the rollout quickly became chaotic.
The city published a supplemental property list containing more than 900,000 residential properties, while roughly 17,000 owners received notices warning that their homes could potentially be subject to the surcharge.
Three homeowners — Simon Hedley, Rachel O’Brien and Carmine Morano — challenged the implementation, arguing that their primary residences had been improperly flagged. Their lawsuit focuses on how the city identified properties and required residents to prove they were exempt rather than challenging the tax itself.
On Monday, State Supreme Court Justice Wayne Ozzi issued a temporary restraining order directing the city to remove the massive property roll and halt further actions based on the notices while the legal fight continues. The judge raised concerns that affected homeowners had not been adequately told why they were identified as potentially liable for the surcharge.
For opponents of the rollout, the decision represents an early courtroom victory.
But Mamdani’s administration is not backing down.
New York City quickly filed an appeal, which triggered a stay of the lower court’s order and allows the administration to continue implementing the tax while the case moves forward. The mayor’s office says it remains confident that the surcharge is legal and can be administered fairly.
A further court hearing is scheduled for August 31, meaning the battle over one of Mamdani’s signature “tax the wealthy” policies is far from finished.
For now, however, homeowners challenging the rollout have scored a significant legal win — turning Mamdani’s luxury-home tax into one of New York City’s newest political and courtroom showdowns.
