Why NYC Mayor Mamdani’s pied-à-terre tax just hit a roadblock: ‘Homeowners are being substantially harmed’

Homeowners sued the city in August over the publication of the list, which they said caused “mass confusion” and “facilitated, invited and amplified unwanted scrutiny of homeowners’ personal information.”

The lawsuit

The suit did not challenge the legality of the tax. Instead, it targeted the rollout, which it argued put the burden on homeowners to prove their residency status. The suit included three petitioners who claimed the city incorrectly listed their homes as potential targets of the tax despite it being their primary residence.

Judge Wayne M. Ozzi ruled on Sept. 29 that the tax roll must be removed from the city website and replaced with a secondary roll that more accurately reflects the properties that are legitimately subject to the tax.

“No crime is involved here, but homeowners are being substantially harmed and penalized needlessly by DOF’s method of implementing the tax law,” Justice Ozzi wrote, according to Business Insider.

The city also sent about 17,000 letters to residents notifying them that they’d either need to file for an exemption or be hit with the tax. Judge Ozzi ruled those notices must also be cancelled and mailed again in compliance with a new list of rules.

“We’re gratified that the court has recognized we were right all along,” Randy Mastro, an attorney representing the plaintiffs, said in a statement, according to CNN. “The fact is that this administration failed to follow state law when it burdened New York City homeowners with proving they live in their own homes or be on the hook for paying a new surcharge.”

The city responds

The controversial tax was part of Mayor Zohran Mamdani’s fiscal year budget for 2027. It will place a surcharge on non-primary residences in the city that are valued over $5 million, as well as co-ops valued at $1 million or more.