A New York judge has ordered the city to scrap its initial rollout of the pied-à-terre tax, directing Mayor Zohran Mamdani’s administration to restart the process with stricter eligibility rules. The suit, spearheaded by former Deputy Mayor Randy Mastro, was brought on behalf of homeowners who believed they shouldn’t have been named on any list of homeowners potentially eligible for the pied-à-terre tax.
The supplemental tax roll that included their names must be removed from the Department of Finance website and the mailed notices homeowners already received must be canceled, Judge Wayne M. Ozzi said in his order. The initial list included properties valued at $5 million or more for one-, two-, or three-family homes, or $1 million or more for co-ops and condos. The city had also sent notices to 17,000 homeowners warning they might face the second-home surcharge.
The judge found that the city failed to conduct adequate due diligence before sending out notices. He criticized the administration for shifting the burden of proving exemption to homeowners, calling it an “unlawful burden shifting.” Ozzi also noted that the city relied on outdated tax records to determine eligibility, which Mastro described as an attempt to “embarrass” homeowners by publishing their names.
The city’s spokesperson, Matt Rauschenbach, called the ruling “wrong” and said the administration would seek a stay of the injunction to continue implementing the tax. The deadline for homeowners to submit exemption applications—already extended twice—is now October 6. Jason Haber, co-founder of the American Real Estate Association, said the case was never about the tax itself but about whether the city followed its own rules before imposing it.
This legal setback comes as Mastro also filed a broader constitutional challenge to the pied-à-terre tax in Suffolk County Supreme Court. The new suit, joined by hotelier Steve Wynn, former Commerce Secretary Wilbur Ross, and philanthropist Hilary Geary Ross, alleges the state’s law is discriminatory. A separate Richmond County case, involving real estate developer Kenneth Fishel and relatives of Council Member Frank Morano, similarly targets the flawed rollout.
Judge Ozzi ordered the city to use the most recent available tax information in making its determination of primary or secondary residence status Mastro argued during oral arguments that the city’s reliance on outdated records was a key flaw. The judge described the initial rollout as “arbitrary and capricious,” violating due process rights of those listed.
Mastro, who has sued multiple mayors over housing policies, urged the city not to appeal automatically. “They published a log of hundreds of thousands of New Yorkers who are homeowners to embarrass them,” he said. “This one’s a whopper, and that’s what a judge has now found. So do it over again and do it right.”
The city’s response framed the dispute as wealthy homeowners resisting their “fair share.” Rauschenbach’s statement accused opponents of using lawsuits to avoid taxes, while emphasizing the administration’s commitment to working-class New Yorkers.
