An appeals court has revived New York City’s pied-à-terre tax rollout, temporarily lifting a restraining order that had halted enforcement just days earlier, according to the New York Post. Associate Justice Phillip Hom of the Brooklyn Appellate Division signed the order Thursday, allowing the city to resume the rollout while a full appeals panel considers the underlying case.
The reversal is the latest twist in a fight RealtyWire first covered when a lower-court judge halted the rollout earlier this week. That restraining order came after three homeowners sued the city, arguing they had been incorrectly targeted by the tax’s rollout process.
What the tax covers
The tax, pushed by Mayor Zohran Mamdani as part of a broader push to raise revenue from wealthy residents, applies to one- to three-family homes worth at least $5 million and condos valued at $1 million or more that are unoccupied, non-primary residences. Gov. Kathy Hochul and state lawmakers approved the tax in the spring, since it required state-level sign-off.
The rollout has been chaotic from the start. City officials published a database identifying roughly 900,000 homeowners who might owe the tax, and the city’s Department of Finance mailed 17,000 notices warning property owners they could be taxed unless they filed for an exemption. Many recipients said their properties appeared to fall outside the tax’s actual scope, fueling confusion and, ultimately, the lawsuit that triggered this week’s restraining order.
A narrowing legal fight
Thursday’s appellate ruling does not touch the legality of the tax itself — the underlying lawsuit challenges only how the city carried out the rollout, not the surcharge’s validity. In court papers, the city’s attorneys argued the case is weakening on its own terms: one of the three homeowner plaintiffs, Simon Hedley, filed an administrative appeal of his own tax notice a day after the lawsuit began, and the city says it has since approved that appeal, potentially mooting his claim.
Randy Mastro, the attorney representing the homeowner plaintiffs and a former first deputy mayor of New York City, rejected the city’s framing. He called the administration’s push to keep enforcing the tax “an astonishing display of chutzpah” in court filings, and said in a statement: “It is a shame that the City can’t own up to its own mistakes and admit that it has badly botched the rollout of this surcharge. Instead, the administration is doubling down, going to court to ensure that it can continue harassing and threatening New York City homeowners who clearly are permanent residents.”
What it means
The appellate order and its narrow scope — a temporary lift of a restraining order pending full review, not a ruling on the tax’s merits — are verified facts from the court record and reporting on it. Mastro’s characterization of the rollout as “botched” is the plaintiffs’ attorney’s attributed position, not an adjudicated finding, just as the city’s mootness argument about Hedley’s claim is the city’s own litigation position rather than a settled fact.
For now, the practical effect is that the city can keep enforcing the tax while the broader appeal plays out, meaning owners of qualifying second homes should expect the notice and exemption process to continue rather than pause. The case underscores a recurring tension in Mamdani’s early tax policy: even when a new levy survives legal challenges to its substance, execution problems — mismatched property records, confusing notices — can generate litigation risk on their own.
