New York (CNN) — A Staten Island judge on Monday temporarily blocked the controversial rollout of New York Mayor Zohran Mamdani’s pied-à-terre tax, pausing enforcement of one of his signature campaign promises: taxing the rich.
The judge’s order pauses the rollout of the surcharge on high-value second homes in the city while a lawsuit brought by a group of homeowners moves forward. The group says the city wrongly flagged their primary residences as subject to the tax.
Under the temporary restraining order, the city must take down the public tax roll and is barred from issuing any additional notices while the order is in effect. The next hearing is set for August 31.
The judge said from the bench the tax notices sent to the homeowners caused irreparable harm because they did not explain why recipients had been flagged for the surcharge and warned that homeowners who failed to file for an exemption would be subject to the tax.
The ruling came hours after Mamdani, at a Monday morning news conference, vowed to “vigorously defend” the city’s position in court.
The pied-à-terre tax places a surcharge on non-primary residences in New York City valued at least $5 million and on condominiums and co-ops valued at $1 million or more. It was enacted as part of the state budget and signed into law in May in an effort to close the city’s budget gap. Gov. Kathy Hochul announced the proposal alongside Mamdani in April and signed it into law.
The lawsuit, filed Friday in state Supreme Court, Richmond County, was brought by three homeowners — Simon Hedley, Rachel O’Brien and Carmine Morano — who allege the city incorrectly identified their homes as potentially subject to the surcharge despite the properties serving as their primary residences, according to a news release.
The suit does not challenge the legality of the tax itself but scrutinizes the city’s release of a tax roll that included the names, and addresses and property values of more than 900,000 New York City residential properties — including those not subject to the tax — as well as notices sent to some residents. About 17,000 property owners received letters alerting them that they may be subject to the surcharge.
“We are very gratified by the judge’s decision, which has vindicated the rights of hundreds of thousands of New York City homeowners who were subjected to a process they never should have been a part of in the first place,” said Randy Mastro, the plaintiffs’ attorney.
This story has been updated with additional information.
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