By Molly Crane-Newman and Josephine Stratman
New York Daily News
(TNS)
NEW YORK — Striking a blow to New York City Mayor Zohran Mamdani’s rollout of his pied-à-terre tax on the rich, a Staten Island judge on Tuesday ruled in favor of owners of high-value second homes who sued the city and ordered the city to start the process over.
Justice Wayne Ozzi found that notices the city mailed to property owners informing them that they may be subject to the surcharge were unlawful and had to be canceled and re-sent. He also ruled that the controversial supplemental property tax roll posted online must be taken down.
“No crime is involved here, but homeowners are being substantially harmed and penalized needlessly,” Ozzi wrote in a 22-page decision, referring to the city’s method of implementing the tax law on high-value second homes.
The city did not immediately respond to a request for comment. The second-home surcharge is a key source of revenue for the city, expected to raise a whopping $500 million to help close what ahd been a massive budget gap.
Randy Mastro, representing the homeowners in the case, said the city had botched the rollout and wasted taxpayers’ time.
“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,” Mastro said. “Now the administration must go back and do what it should have done from the start: use all the information at its disposal to make an individualized ‘initial determination’ about who truly owes this surcharge before demanding that they pay it.”
The city and the state have estimated that the number of properties impacted will be around 10,000. A larger net was cast in July when the city wrote to approximately 17,000 luxury property owners, saying they may be subject to the tax and could file for an exemption. Around 900,000 pricey properties were described in an online public database as potentially related to the surcharge.
The initial letters were based in part on information culled from homeowners’ 2024 personal tax returns. After those notices went out, the city obtained more recent tax forms from the state six months ahead of schedule and contacted hundreds of people to notify them that they were not, after all, subject to the pied-à-terre tax.
The wife and father of Republican Staten Island Councilmember Frank Morano, Rachel O’Brien and Carmine Morano, were among the homeowners who sued the city over the rollout of the surcharge, which targets luxury second homes owned by non- New York City residents valued over $5 million, or co-ops and condos with a market value over $1 million.
Though the Moranos and their co-plaintiff Simon Hedley later learned they weren’t subject to the charge, Mastro—a frequent defender of well-heeled New Yorkers and Mamdani critic who served in top roles under mayors Rudy Giuliani and Eric Adams—had claimed they were put through “hell” when the city informed them they might have to pay it over the summer.
The homeowners’ suit did not challenge the statute, but rather the manner in which the process had been carried out.
“It is so offensive!” Mastro argued during heated oral arguments before Ozzi last month, claiming homeowners suffered untold harm from having to consult lawyers and accountants and from having their tax data shared with the city.
City Law Department chief Steve Banks had argued to Ozzi that the suit should be tossed because the homeowners who brought it hadn’t been harmed and there was thus no relief to grant.
“This is a case about nobody with a live claim,” Banks said at last month’s hearing. “The case before your honor is not an actual case in controversy—it’s a policy dispute dressed up as a case in controversy.”
Corp. counsel Banks countered that Mastro and the homeowners had manufactured claims to fight a policy they didn’t like after receiving a non-final agency determination that ultimately did not impact them. He said the process was an iterative one and that no laws had been violated.
Mamdani’s pied-à-terre tax, which Gov. Kathy Hochul signed into law in May, aims to use money from wealthy people with primary residences elsewhere to help fund his affordability agenda. Homeowners who permanently live in the city, or have an immediate family member living there, are among those who qualify for exemptions.
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More than 2,000 people have challenged their status, with the city recently extending the deadline to submit proof of residency to Oct. 6.
In a video announcing the tax in April, Mamdani held up as an example the $238 million penthouse on Billionaires’ Row belonging to Chicago-based hedge funder Ken Griffin, which was the most expensive home ever purchased in the U.S. when he bought it in 2019.
“This pied-à-terre is specifically designed for the richest of the rich—those who store their wealth in New York City real estate, but who don’t actually live here,” Mamdani said.
“Most of the time, these units are sitting empty since, again, they don’t actually live here. This is a fundamentally unfair system that hurts working New Yorkers.”
“I believe everyone has a role to play in contributing to our city. And some, a little bit more than others.”
Photo credit: Zohran Kwame Mamdani/Facebook
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©2026 New York Daily News. Visit at nydailynews.com. Distributed by Tribune Content Agency LLC.
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