New York City Mayor Zohran Mamdani won an appeals court ruling Wednesday that lets his administration keep moving ahead with a tax on expensive second homes. The court overturned a lower-court order requiring the city to restart the tax’s rollout.
The four-judge panel unanimously dismissed a lawsuit brought by homeowners, ruling that they did not have legal standing to sue. A Staten Island judge had issued the order in September.
The decision clears the way for the city to continue implementing the surcharge, commonly called a pied-à-terre tax. The measure is part of Mamdani’s effort to raise revenue from wealthy New Yorkers and address the city’s budget shortfall. Other legal challenges to the tax remain unresolved.
Approved by the state Legislature in May, the surcharge applies to qualifying second homes worth at least $5 million if they are one- to three-family properties, or at least $1 million if they are condos or co-ops. The city’s Department of Finance sent preliminary determination notices to about 17,000 property owners in July.
The appeals court said that receiving an initial tax notice or being listed on the city’s property valuation roster did not, by itself, show that the homeowners had suffered enough harm to bring a lawsuit. It also rejected claims that the process caused concrete harm through privacy concerns or the expense of applying for an exemption.
Mamdani welcomed the ruling and accused wealthy property owners of using legal challenges to avoid paying more toward the city.
“From day one, those with the most have attempted to use every legal avenue available to shield their wealth and avoid contributing more to our city,” he said.
Randy Mastro, the homeowners’ lawyer, said the court had sidestepped the substance of their challenge by dismissing the case on procedural grounds. He argued that the city’s rollout had been mishandled and said the process could force people who do not owe the surcharge to prove they live in their homes or face a tax bill.
Mastro said the tax would face another legal challenge next month, this time over its constitutionality. Mamdani said the city would continue defending the law in separate cases in Suffolk County.
