A state judge has temporarily blocked New York City's pied-à-terre tax, which aimed to place a surcharge on second homes. The ruling follows a lawsuit filed last week by a group of homeowners against Mayor Zohran Mamdani and the city’s finance director.
The proposed tax would apply to individuals owning a house worth over $5m, or a condominium or cooperative unit worth at least $1m, if it is not their full-time residence. Homeowners alleged that the city incorrectly identified their properties as potentially subject to the surcharge despite them being primary residences.
The temporary pause means the city is currently barred from issuing further letters notifying homeowners of potential tax liability and from maintaining a public list of properties. The city had previously published a tax roll of around 960,000 owners and sent notices to 17,000 addresses.
Matt Rauschenbach, a spokesperson for Mayor Mamdani, stated that the mayor's office disagrees with the ruling and plans to appeal immediately. The city expects the appeal to stay the order, allowing implementation of the tax to continue.
When announced in April, Mayor Mamdani and New York Governor Kathy Hochul projected the tax would generate $500m in annual revenue. Critics of the tax, including business leaders, Republicans, and some moderate Democrats, have expressed concerns that it could lead wealthy individuals to leave the city.