Editor’s note: Two of the three petitioners are Staten Islanders, who are also homeowners, who feel that the rollout of this new tax was mishandled. You can see the Borough President’s statement about the first ruling in this case, which favored the City residents, below the statements from NYC Common Sense. As of now, the rollout is suspended, and homeowners do not have to preemptively prove that their residence is a secondary, and not primary, residence. You can also see Mayor Mamdani’s statement on the lawsuit and the tax itself, along with new guidance issued by the Mayor’s Office here. And you can read the Staten Island Borough President’s opinions and statements about this tax here. It is uncertain if this injunction will last, or how the case will ultimately play out in court. Since this was in the budget bill passed by the Senate and Assembly and signed by the Governor, it is likely that it will continue at some point soon. The state and city are allowed to levy new taxes as needed; it is one of the privileges granted to states under the Constitution. As such, its rollout may be modified or extended, but it will be coming. Those Islanders who do have a secondary home that is over $5 million should expect to add the new surcharge to their state taxes for this year come next April.
Lawsuit Challenges Mamdani Administration’s Botched Rollout of New ‘Pied-à-Terre Tax’
Plaintiffs Allege City Ignored State Law, Shifted Burden of Responsibility to Homeowners, and Misused Statutory Authority for Political Purposes
New York, NY (August 7, 2026) — Three New York City homeowners today filed sut in State Supreme Court, Richmond County, challenging the Mamdani administration’s implementation of the new surcharge on residential property that does not serve as a primary residence, commonly referred to as the “Pied-à-Terre Tax.”
The petitioners, Manhattan homeowner Simon Hedley and Staten Island homeowners Rachel O’Brien and Carmine Morano, represented by former First Deputy Mayor Randy Mastro, allege that the City incorrectly identified their homes as potentially subject to the surcharge despite those properties serving as their primary residences. Their complaint details how the City’s implementation of the surcharge has been rushed, overinclusive, and contrary to the express terms of the State law authorizing it.
The lawsuit, found here, does not challenge the legality of the surcharge itself, which was approved by the state Legislature earlier this year. Instead, it challenges how the City implemented the law, alleging that the administration failed to follow the process required by statute and improperly placed the burden of responsibility on homeowners to prove they do not owe the surcharge.
The lawsuit asks the court to declare the City’s notices and supplemental property roll unlawful, require the removal of the publicly released property list, pause any obligation for homeowners who received notices to respond while the case moves forward, and prevent further enforcement based on those notices until the court reaches a decision.
Despite having resided in New York City his entire adult life and having been legally required to live in the five boroughs when he was first deputy mayor, Mastro, a partner at Dechert LLP, also erroneously received a notice letter from the Mamdani administration.
“The Mayor wanted a headline, and he got one,” Mastro said. “But the one thing his administration didn’t do was follow the law. Under this new state law, it is the City’s responsibility and obligation in the first instance to determine which homes actually owe this surcharge. Instead, City Hall posted the names and addresses of nearly 1 million homeowners on a list it now says means nothing, mailed 17,000 notice letters demanding that New Yorkers prove they live in their own homes, and gave them only a few weeks at the height of the summer season to do it. Thousands of people who owe nothing have been confused, exposed, and put to real expense so this administration could make a political point. That is not lawful notice.”
According to the petition, the state Legislature instructed the Department of Finance (DOF) to use information broadly available to the City to determine whether a property appears to meet the requirements for the surcharge – including whether it exceeds the value threshold and is used as a non-primary residence – before notifying a homeowner that the surcharge may apply.
However, the lawsuit alleges, the administration took a different approach. Rather than reviewing existing records, it arbitrarily released the names, addresses, and property values of more than 900,000 residential properties and sent notices to approximately 17,000 homeowners warning that they “may be subject” to the surcharge unless they submitted an exemption request.
The plaintiffs argue that many of those notices went to New Yorkers who have lived in their homes as their primary residences for years and whose residency status could have been verified using information that is readily available to the City.
The complaint further alleges that the administration ignored the expertise and resources of its own DOF and chose a public rollout focused more on political messaging than effective governing. The plaintiffs argue that the process unnecessarily singled out an entire group of taxpayers, created confusion, and placed an unfair burden on thousands of New Yorkers who were never intended to be subject to the surcharge.
“It is absolutely absurd that the City publicly identified our home as a possible second residence when my husband and I live here, raise our family here, and have made it our permanent home,” petitioner Rachel O’Brien said. “The City had records available that could have confirmed that before publishing our name and address. Families should not be forced to correct the government’s mistakes because the administration rushed a politically convenient rollout.”
“My family and I support Mamdani and back key parts of his platform for a better New York City,” petitioner Simon Hedley said. “As a full-time New York City resident and homeowner, receiving a threatening letter warning of a potentially massive Pied-à-Terre surcharge bill was deeply unsettling. The City has endless ways to verify residency; resorting to a scattergun approach and demanding that residents prove their status is disturbing, and not a very friendly act toward someone who lives in New York City.”
A Statement from Borough President Vito Fossella on Court Ruling Against Pied-a-Terre Tax Rollout
Staten Island, NY – Borough President Vito Fossella issued the following statement regarding the ruling issued by State Supreme Court against the luxury second home tax rollout:
“We are pleased with today’s ruling issued by Judge Wayne Ozzi in State Supreme Court, Richmond County, halting the rollout of the City’s “pied-a-terre” second home tax.
Thanks to the injunction, as of now, homeowners would no longer need to take any action to prove their residence is their primary address, pending further developments in court.
The City engaged in one of the most mishandled, inappropriate rollouts of a policy that we have ever seen. We have said from the start, joined by many homeowners across several rallies, that the City committed an injustice against the hardworking homeowners who make up its foundation.
The City should do the right thing and put the brakes on this rollout.
That this pied-a-terre rollout has been halted in court should be a stark message to this City that enough is enough.
The City has the power to do the right thing, exercise common sense and end this attack on innocent people.”
Banner Image: Harlem brownstones. Image Credit – Ronny Rondon
