Staten Island judge voids 17,000 pied-à-terre tax notices and orders the city to redo its review
Owners got the warning letters in July. The court says the city must check its records again before it labels any home a second residence.
About 17,000 letters that New York City sent to property owners about the new pied-à-terre surcharge are no longer valid. On Tuesday, state Supreme Court Justice Wayne Ozzi on Staten Island voided them and told the Mamdani administration to begin its review again.
Under the ruling, the city may not call a home a second residence until it has examined “any and all resources and information available.” It must also share the records behind that conclusion. Ozzi told the Department of Finance to remove its public list of more than 900,000 properties and to mail new notices to owners who may be liable. Homeowners “are being substantially harmed and penalized needlessly,” he wrote.
Why the pied-à-terre tax notices were thrown out
After the July mailing, finance officials found that close to 6,000 of the addresses, about 35%, were owners’ main homes and therefore exempt. The city has admitted it checked personal income tax returns only after the letters went out.
Former deputy mayor Randy Mastro brought the case for several homeowners and a co-op, among them the wife and father of Frank Morano, a Republican councilmember from Staten Island. In his view, the city had no right to make owners prove they live in their own homes. “We’re gratified that the court has recognized we were right all along,” he said after the ruling. Leaders of the Real Estate Board of New York welcomed the outcome as well, with the group’s president calling the rollout “deeply flawed.”
Who owes the NYC pied-à-terre tax and what City Hall says next
Mayor Zohran Mamdani asked the state for the tax to help close a $5 billion budget gap. Lawmakers approved it, and Gov. Kathy Hochul signed it in May. It applies to co-ops and condos valued at $1 million and up, and to houses with one to three units once their market value reaches $5 million. The administration projects $500 million in revenue each year.
The administration does not plan to stop collecting. Officials will “invoke a stay of the injunction” and go on running the surcharge while the case continues, according to Matt Rauschenbach, who speaks for City Hall. Whether an appeal is coming was not immediately clear, since Corporation Counsel Steve Banks gave no answer right away. Because of the ruling, the rollout could be delayed through the end of 2026.
A second lawsuit was filed Monday in Suffolk County. Wynn Resorts founder Stephen Wynn, former U.S. Commerce Secretary Wilbur Ross and Ross’s wife, Hilary Geary Ross, are challenging the state on constitutional grounds. They say the tax targets only people who do not live in the city. The three are full-time Florida residents who own real estate in New York City. According to their complaint, notices say the Rosses owe an extra $83,531.52 on their co-op and Wynn an extra $183,094.69 on a Manhattan property. City Hall plans to join that case on the side of the tax, Rauschenbach said.
Quick answers
Who has to pay the NYC pied-à-terre tax?
Owners of property that is not their primary residence. It covers co-ops and condos valued at $1 million or more and one- to three-family houses worth at least $5 million.
What does the ruling mean for owners who got a notice?
The July notices are void. The city must redo its review and send new notices, but City Hall says it will invoke a stay of the injunction.
How much money is the tax supposed to raise?
The Mamdani administration projects about $500 million a year.
