A Staten Island judge halted Mayor Zohran Mamdani's second-home tax rollout, ruling the city needlessly harmed homeowners with a bungled list City Hall has already appealed.
State Supreme Court Judge Wayne Ozzi ruled for homeowners who sued New York City over its handling of the so-called pied-à-terre tax, a marquee piece of Mayor Zohran Mamdani's "tax the rich" agenda.
Ozzi found the Department of Finance mishandled the rollout before collection even settled. He ordered the city to pull its sprawling property list and replace it with a narrower one showing only homes actually facing the surcharge. The tax itself remains legal. Collection method does not.
The city appealed Tuesday night and invoked an automatic stay, keeping implementation alive for now. Money owed under the surcharge is still supposed to arrive by next spring.
Homeowners argued the city never worked hard enough to decide who should owe the tax before it started collecting. Residents said the rollout caused mass confusion. Ozzi agreed on the core point.
Daily Mail reported the judge's blunt assessment of the harm.
"Homeowners are being substantially harmed and penalized needlessly by D.O.F.'s method of implementing the tax law,"
The city had published a list of almost a million properties that could face the tax and named roughly 17,000 owners. Officials then gave residents a one-month window to prove a listed address was their primary home. Homeowners said the city ignored state data that already showed residency and dumped the burden on them instead.
Lawyer Randy Mastro, representing the homeowners, put the failure in plain terms.
"City Hall botched this rollout and should have just admitted the errors and fixed its own mistake, instead of wasting time and taxpayer dollars by fighting it in court,"
Breitbart reported Ozzi went further on the due-process problem. The judge found the Department of Finance used outdated lists and unlawfully shifted the burden onto thousands of homeowners to prove basic residency. He ordered the supplemental roll removed from the department website, prior notices canceled, and a new non-speculative list built before any fresh notices go out. Those notices must explain why each property qualifies.
"The refusal to use the tax data that was ‘sufficiently available’ to DOF unfairly shifted the burden to thousands of homeowners to prove their basic residency"
Ozzi added that the shifted burden was not hyperbolic. Many owners, he wrote, might need lawyers or accountants simply to prove they live in their own homes, information the department already could have used.
The public roll covered more than 900,000 properties. Roughly 98 to 99 percent were not even subject to the surcharge. A disclaimer appeared only after the confusion spread.
Gov. Kathy Hochul, a Democrat, signed the tax into law. It targets three-family homes worth at least $5 million and condos and co-ops valued at $1 million or more that are not primary residences. Rates rise with value. The top rate hits 1.3 percent of a single-family home worth more than $25 million, and 6.5 percent of a condo or co-op worth more than $5 million.
City projections put the haul near $500 million a year. That figure now sits behind a process a judge has already called needlessly punitive.
The New York Post reported an earlier temporary restraining order from the same Staten Island court that paused action on about 17,000 notices and forced the city to take down an online list of roughly 900,000 potentially affected taxpayers. Three homeowners had sued over erroneous notices and the same complaint: available state data ignored, burden shoved onto residents. City Hall disagreed with that order too and vowed to keep fighting.
Mamdani spokesperson Matthew Rauschenbach cast the lawsuits as the ultrawealthy ducking their "fair share."
"Our administration is fighting every day to deliver for working New Yorkers,"
He continued:
"The ultrawealthy are fighting in court to avoid paying their fair share. They have filed lawsuit after lawsuit to protect their privilege, and we will not back down."
Rauschenbach said the city will "continue implementing the surcharge fairly, efficiently and in full compliance with the law." The judge's order says the fairness claim does not match the method used so far.
In the earlier pause fight, Rauschenbach offered a similar line: confidence in the surcharge and in the city's ability to implement it "fairly and effectively," plus the claim that owners of second homes valued at $5 million or more should "contribute their fair share to the city they benefit from." Fair share talk does not fix a list that swept in hundreds of thousands of properties that never owed the tax.
While the tax cases piled up, Mamdani's office moved to stand up a Business Advisory Council of 15 leaders to meet quarterly with the mayor and Deputy Mayor for Economic Justice Julie Su. The group is meant to advise on finance, technology, real estate, sports, entertainment, retail, and healthcare. Named members have included Chobani CEO Hamdi Ulukaya, Etsy CEO Kruti Patel Goyal, New York Liberty CEO Keia Clarke, Brandon Blackwood, Northwell Health's John D’Angelo, Amalgamated Bank's Priscilla Sims Brown, and restaurateur Marcus Samuelsson.
Kathryn Wylde, former CEO of the Partnership for New York City, called the council an honest try to hear from people outside the mayor's natural base. She also said he is not used to messaging to that audience and does not always anticipate how they will react. Ulukaya had urged regular dialogue with the business community back in April. Some heavy hitters approached for the council, including Bank of America's Jose Tavarez, former American Express chief Ken Chenault, and private equity executive Charles Phillips, did not join. The mayor's office said some executives skip such roles over time, media attention, or company clearance.
That outreach sits next to a tax fight that has already produced a temporary pause, a public list of nearly a million properties, canceled notices, and a fresh appeal. Prior friction with billionaire Ken Griffin over a video message outside his 220 Central Park South penthouse only sharpened the sense that City Hall and high-dollar owners are talking past each other.
The surcharge is still on the books. Hochul signed it. Ozzi did not erase the law. He erased the city's preferred way of finding targets: a giant speculative roll, a short fuse for ordinary owners to prove they live where they say they live, and a public naming exercise that mixed the liable with the clearly not liable.
Homeowners who never owed the tax still faced the scramble, the professional bills, and the stigma of the list. The judge called that needless. City Hall called it a fight for working New Yorkers. Both statements cannot fully describe the same rollout.
An automatic stay keeps the city's machinery moving while the appeal runs. The payment clock still points toward next spring. What no longer stands is the claim that the first pass was careful, targeted, or fair to the people who had to answer it.
When a "tax the rich" plan starts by confusing almost a million property records and forcing innocent owners to hire help to prove they live at home, the problem is not privilege. It is competence, and voters notice which one actually showed up in court.
