A state judge on Tuesday threw out the first round of notices under New York City's new pied-à-terre tax, ruling that Mayor Zohran Mamdani's administration has to restart the process. It is a significant setback for one of the mayor's signature policies.
Staten Island Supreme Court Justice Wayne Ozzi found that the city acted in an "arbitrary" and "capricious" way when it sent notices to more than 1,000 people who were not subject to the surcharge. That left them to prove their own exemptions. He ordered all of the roughly 17,000 notices canceled and directed the Department of Finance to make an individual determination for each property before sending new ones.
The administration said it will appeal.
Who the Tax Targets
The surcharge, approved by Gov. Kathy Hochul and the state Legislature, applies to properties that are not anyone's primary residence and sit empty. It covers one- to three-family homes worth at least $5 million, and co-ops and condos valued at $1 million or more. City officials estimate it will raise more than $500 million a year for schools, libraries and other services.
More Challenges Filed
Randy Mastro, the lawyer for the Staten Island homeowners, said the ruling confirmed that the city had ignored state law by making owners prove they live in their own homes. On Tuesday he filed a second suit in Suffolk County for another group of homeowners and a city co-op corporation, arguing that the tax violates the state constitution.
Casino developer Steve Wynn and former Commerce Secretary Wilbur Ross, who both live primarily in Palm Beach, Fla., filed their own constitutional challenge in Suffolk County on Monday. According to the filings, Wynn was billed $183,000 in July for his Manhattan property and Ross was billed $83,000.
Hochul was unmoved. In a post on X, she said that when Wynn and Ross present themselves as sympathetic figures over taxes on their extra multimillion-dollar homes, they make the case for the tax better than its supporters could. Mamdani announced the tax earlier this year outside hedge fund manager Ken Griffin's $238 million penthouse.
Based on reporting by the New York Post (nypost.com). Photo: Billionaires' Row towers above Midtown Manhattan, 2020 (Itrytohelp32, CC BY-SA 4.0, via Wikimedia Commons).
