Staten Island Judge Halts NYC’s Second Home Tax Implementation

A judge in Staten Island has put a stop to New York City’s implementation of a tax on second homes valued over $5 million, stating that the Department of Finance (DOF) conducted the process in an unfair manner.

This new tax, known as the pied-à-terre tax, was introduced as an annual property tax on certain non-primary residences starting on July 1st. It was put forth under the leadership of Mayor Zohran Mamdani and Governor Kathy Hochul, primarily as a strategy to address the city’s budget deficits without cutting vital services or increasing costs for working-class residents.

On Tuesday, Supreme Court Judge Wayne Ozzi, who is associated with the Democratic Party, declared in a court document that the procedures used by the DOF in deciding which homeowners owed the tax violated due process rights.

The policy establishes an additional charge on non-primary residences, specifically targeting one- to three-family homes valued above $5 million as well as individual condominium or cooperative units priced over $1 million.

Randy Mastro, the attorney representing the plaintiffs, described the rollout of the tax as a “total screwup” during an interview.

“Sometimes city administrations screw up. This one is a whopper,” Mastro said. “The way the Mamdani administration rolled this out is totally botched, a debacle.”

In response, the city has already initiated an appeal against the judge’s decision.

“Monday’s decision is wrong, and we will invoke a stay of the injunction,” stated a spokesperson for the city. “With a stay, we will continue implementing the surcharge fairly, efficiently, and in full compliance with the law, as we have since day one. New York is a city for the many – not a tax haven for the wealthy few.”

Mastro, however, suggested that instead of appealing, the city should improve the initial rollout.

“Do it over and do it right, issuing notices only to persons it has determined owe the tax,” he remarked.

A pressing issue now is whether the city can finish its work before the tax bills are due to be sent out in November. Mastro believes that seven weeks is adequate time to address this, emphasizing that it is crucial for the city to meet its revenue expectations for the year. Simultaneously, other legal challenges against the tax remain ongoing.