Mamdani, Hochul Secure Stay in Court Order Against Pied-à-Terre Tax Rollout

It may be back to the drawing board for Mayor Zohran Mamdani in the rollout of his pied-à-terre tax after a Staten Island judge ruled Tuesday the tax’s debut was mishandled and that the mayor must start over.

But, for the time being, the city will continue in its current trajectory after filing an appeal late Tuesday and invoking an automatic stay in the process, according to city officials.

Unless the Mamdani administration can find a more permanent solution to the court ruling, though, it will have to rethink its approach to taxing second homes in New York City valued over $5 million.

New York State Supreme Court Judge Wayne Ozzi ordered the city to take down a public list of about 900,000 New York City homes suspected of being pieds-à-terre.

Some in the real estate industry think the Staten Island judge’s decision was justified.

“This is an important victory for the thousands of New Yorkers who were wrongly swept into an arbitrary and confusing process,” Real Estate Board of New York President James Whelan said in a statement. “While the court’s ruling focuses on the implementation of the tax, it reinforces broader concerns about the legality and fairness of the tax itself. The legal challenges are far from over, and we remain confident that New York homeowners will continue to prevail as these cases move forward.

The lawsuit was launched by Wynn Resorts founder Stephen Wynn and former U.S. Commerce Secretary Wilbur Ross after both received notices that they owe an additional $183,094.69 and $83,531.52, respectively, for their homes in New York City, according to Gothamist.

But the Mamdani administration stayed firm in its rollout of the pied-à-terre tax.

“Our administration is fighting every day to deliver for working New Yorkers. The ultra-wealthy are fighting in court to avoid paying their fair share,” Matt Rauschenbach, a City Hall spokesperson, told media outlets late Tuesday. “They have filed lawsuit after lawsuit to protect their privilege, and we will not back down.”

Rauschenbach did not immediately respond to a request for an updated comment Wednesday morning.

A spokesperson for Gov. Kathy Hochul, who earlier this year championed approval of the tax to raise an annual $500 million for city operations, backed the mayor’s sentiment.

“When Steve Wynn and Wilbur Ross try to cast themselves as sympathetic figures in a fight over paying their fair share on multimillion-dollar second homes, they’re making the case for the pied-à-terre tax as well as anyone could,” Jen Goodman, a spokesperson for Hochul, said in a statement. “Gov. Hochul believes some of the wealthiest people in the world, and the powerful interest groups fighting on their behalf, can afford to help pay for the police officers, trash pickup and snow removal that keep New York City running.

Goodman added that the Hochul administration would play a role in the legal defense of the tax.

The ruling may force the city to find a new approach to the property tax, but it doesn’t neutralize the threat of a surcharge for the wealthiest altogether.

“It’s important to understand that the new law itself is not, and never was, at risk of being invalidated by this proceeding,” William McCracken of Moritt Hock & Hamroff said in a statement. “However, there’s no question that the court’s directed form of notice will provide significantly more useful information to taxpayers, including what factors and information were considered, and disclosing records or documents used to make the initial determinations.”

New York City Council members agreed with many of the speakers at an Aug. 18 hearing at City Hall. Lawmakers such as Manhattan Councilmember Gale Brewer even stated that her longtime home on the Upper West Side received a notice, and Staten Island Councilmember Kamillah Hanks described the list of potential pieds-à-terre as “a hitlist of the haves and have-nots.”

Ozzi, however, has taken action against the measure before.

He issued the temporary restraining halting the rollout on Aug. 10, which was appealed on Aug. 17.

Mark Hallum can be reached at mhallum@commercialobserver.com.