On Monday, a New York judge put a sudden stop to Mayor Zohran Mamdani’s contentious introduction of a luxury second home tax. The court directed City Hall to remove a disputed list displaying the private details of over 900,000 homeowners in New York City, including their names, addresses, and property values.
Judge Wayne Ozzi issued a temporary order restraining the Mamdani administration from proceeding with actions predicated on this controversial property roll or any mailed notices. He also prohibited the city from enforcing approaching deadlines against affected homeowners.
Furthermore, the judge’s order halts the city’s efforts to impose, assess, or collect the tax surcharge from those listed on the supplemental roll. The city is also barred from dispatching any notifications without conducting proper individual assessments and adhering to the notice requirements mandated by state tax law.
MAMDANI EXTENDS DEADLINE FOR NYC HOMEOWNERS TO SEEK EXEMPTION FROM NEW PIED-À-TERRE TAX
Mayor Zohran Mamdani of NYC finds himself under increased scrutiny following the reappearance of footage where he is seated with a media outlet accused of propagating antisemitic conspiracy theories. (Camara Porter/AdMedia/Sipa USA via Reuters)
The courtroom setback came after attorney Randy Mastro blasted the Mamdani administration over what he called a botched rollout of a surcharge targeting second homes valued at more than $5 million.
“The city screwed this up… got it wrong… stop the train and make them do it over,” Mastro told the court.
Mastro argued that the city was supposed to first determine whether properties actually qualified as non-primary residences before putting homeowners through the surcharge process.
Instead, he said, the administration published a supplemental property roll covering a vast number of properties and sent notices that left New Yorkers scrambling to prove their homes were their primary residences.
Brownstone apartments in Manhattan, New York City, United States of America on July 6th, 2024. (Beata Zawrzel/NurPhoto/Getty Images)
“The city is to bear the burden,” Mastro argued, accusing officials of failing to use available information to determine which properties actually qualified. “They didn’t do their homework.”
Mastro said the publication of property owners’ names, addresses and property values unleashed confusion and public backlash.
“This is ludicrous. It is not right,” he told the court, arguing that the disclosure effectively “doxx[ed]” homeowners.
Outside the courthouse, Mastro declared the ruling “a very good day for all New York City homeowners.”
Mayor Zohran Mamdani speaks at a rally in New York alongside 1199SEIU members and immigration advocates after the Supreme Court ruled the Trump administration can revoke protections for Haitians and Syrians. (Lev Radin/Pacific Press/LightRocket via Getty Images)
“The Mamdani administration botched this rollout,” Mastro said, alleging the city sent letters to thousands of people who live in their own homes and “never should have received a letter suggesting they may be subject to the surcharge.”
He also accused the city of posting a list of “over 900,000 New Yorkers by name, address and property value.”
“That’s a pretty shocking thing that happened,” Mastro said.
The lawsuit was filed by three New York City homeowners who are not challenging the legality of the pied-à-terre surcharge itself, but rather how Mamdani’s administration implemented it.
Brownstone apartment houses in Manhattan, New York, United States, on October 22, 2022. (Photo by Beata Zawrzel/NurPhoto via Getty Images)
They allege the city incorrectly identified their primary residences as potentially subject to the surcharge, failed to conduct the statutorily required individualized initial determination before mailing notices and improperly shifted the burden onto homeowners to prove they were not subject to the surcharge.
One plaintiff, Simon Hedley, ultimately received an exemption after providing tax information. Mastro argued his experience demonstrated how easily the city could have made the required determinations itself.
“Was it negligence, was it laziness?” Mastro asked in court.
The city defended its rollout, arguing that freezing the process would itself hurt taxpayers seeking exemptions and disrupt deadlines. Attorney Steven Banks argued that keeping the supplemental roll in place would preserve the status quo and give taxpayers time to navigate the process.
The hearing grew heated at times as lawyers sparred over the administration’s handling of the tax.
When Mastro attempted to interrupt Banks during the city’s argument, Banks shot back, “Say nothing while I’m speaking.”
The two also clashed over Mastro’s characterization of the notices as “terrorizing” homeowners. Banks called the language offensive in reference to Mamdani being the city’s first Muslim mayor.
“That’s not terrorism,” Banks said of the rollout. “It happens to be acting in accordance with law.”
Mastro later clarified that he was describing how homeowners perceived the notices, arguing that residents viewed them as threatening because they indicated a homeowner was subject to the surcharge.
Mastro repeatedly hammered the administration’s execution of the tax, calling the situation “extraordinary,” the notices “bizarre” and the publication of the property roll “ludicrous.” He argued that “thousands of New Yorkers are on edge” and urged the court to remove what he called the “threat of jeopardy.”
“A TRO radically upsets the status quo,” Banks told the court.
A New York judge temporarily restrained the Mamdani administration from moving forward based on its disputed property roll and mailed notices tied to the city’s new pied-à-terre surcharge. (Michael Nagle/Bloomberg via Getty Images)
In granting the TRO, Ozzi found that the notices caused irreparable harm and that the city, not property owners, was required to make the initial determination. He also found the plaintiffs were likely to succeed on the merits because of missteps by the city, while stressing that the underlying case has not yet been decided.
The judge said he could not “unring the bell” on notices already sent, but could prevent additional mistakes, and said the city had not done its due diligence.
Mamdani’s administration quickly vowed to fight back.
“We disagree with today’s ruling, but we are confident in both the pied-à-terre surcharge and the City’s ability to implement it fairly and effectively,” Matt Rauschenbach, a spokesperson for the mayor, said.
“This surcharge asks those who own second homes valued at $5 million or more to contribute their fair share to the city they benefit from,” he added.
Rauschenbach said the Law Department would “appeal the ruling immediately,” which the administration says will stay the order, and that the city intends to continue implementing the surcharge.
Mamdani himself had struck a defiant tone before the ruling, taking a shot at Mastro over his repeated legal challenges to City Hall.
“There are few things more certain in New York City than death, taxes and Randy Mastro filing a lawsuit against this administration,” Mamdani said.
The mayor said he remained confident both in the legality of the city’s actions and in the surcharge itself, arguing that revenue from second homes worth more than $5 million would help pay for “safer streets,” “stronger schools” and other city services.
When asked directly whether he regretted the rollout, Mamdani defended the administration’s handling of it, while acknowledging that “with any new tax, there are more questions than there are answers.”
Mamdani said only about 17,000 homeowners in a city of 8.5 million are potentially affected and pointed to the city’s extension of an exemption deadline.
The legal fight is now moving quickly.
Ozzi ordered the defense to submit its order to show cause by Aug. 24, with plaintiffs’ replies due Aug. 27. Oral arguments on the merits are scheduled for Aug. 31.