A New York appeals court lifted the temporary restraining order that had blocked Mayor Zohran Mamdani’s pied-à-terre surcharge from moving forward, handing the administration a procedural win in a legal fight that has engulfed roughly 17,000 homeowners and raised sharp questions about how the city rolled out its luxury-home tax.
Judge Philip Hom stayed the lower court’s order while the city’s appeal proceeds, effectively allowing the Department of Finance to resume implementation of the surcharge, a tax on properties valued at $5 million or more that do not serve as primary residences. The ruling came just days after a lower court judge found the city had caused homeowners irreparable harm and that the plaintiffs had demonstrated a likelihood of success on the merits.
The whiplash tells you something. On Monday, Judge Wayne Ozzi blocked the entire rollout, ordered the city to pull a supplemental property roll from its website, and stopped officials from enforcing deadlines tied to surcharge notices already mailed to thousands of New Yorkers. By Thursday, an appellate judge had put that order on ice. Homeowners are now expected back in court August 31 to seek permanent relief, but in the meantime, the Mamdani administration’s surcharge machinery grinds on.
The scale of the city’s initial dragnet is what makes this fight so combustible. The Department of Finance published a supplemental property roll containing information on more than 900,000 homeowners, Fox News reported. From that sprawling list, the department sent initial determination notices to approximately 17,000 property owners, informing them they might owe the surcharge.
Critics say a large portion of those flagged properties appeared to fall well outside the tax’s scope. Three homeowners, Rachel O’Brien, Carmine Morano, and Simon Hedley, sued the city, arguing officials failed to conduct the individualized determinations the law requires before mailing notices. One plaintiff, Hedley, ultimately received approval after submitting documentation proving his property was his primary residence, but only after being forced through a process his attorney called illegitimate.
Randy Mastro, the attorney representing the homeowner plaintiffs, did not hold back in a statement to Fox News Digital:
“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.”
Mastro went further, accusing the Mamdani administration of “doubling down” by going to court “to ensure that it can continue harassing and threatening New York City homeowners who clearly are permanent residents, something the City would know if it would only do its homework.”
The New York Post reported that the three homeowners who sued claimed officials ignored state data they were legally granted access to in order to accurately determine tax eligibility, instead shifting the burden onto residents to prove their own exemptions. Mastro framed the city’s approach bluntly: “You can’t terrorize first and then clarify, which is exactly what the city is trying to do.”
The Mamdani administration moved fast after Judge Ozzi’s Monday order. City attorneys filed appellate papers Thursday, arguing that the notice of appeal and an affirmation of the city’s intention to seek permission to appeal triggered an automatic stay under state law. Alternatively, they asked the court to grant a stay while the appeal proceeds.
The city’s filing framed Ozzi’s order as a disruption to the status quo that threatened to derail the Department of Finance’s implementation under an already tight timeline. Officials warned that leaving the restraining order in place could interfere with property tax bills scheduled to be mailed November 15. The city comptroller projected the surcharge would generate at least $500 million through fiscal year 2028.
Half a billion dollars is a powerful incentive to keep the machinery running, even if the machinery is catching the wrong people.
Matt Rauschenbach, a spokesperson for Mayor Mamdani, issued a statement after Monday’s lower court ruling that telegraphed the administration’s posture:
“We disagree with today’s ruling, but we are confident in both the pied-à-terre surcharge and the City’s ability to implement it fairly and effectively. This surcharge asks those who own second homes valued at $5 million or more to contribute their fair share to the city they benefit from.”
The “fair share” framing is familiar. So is the pattern: announce a tax aimed at the wealthy, implement it with a blunt instrument, and let ordinary homeowners sort out the mess. In this case, the city’s own data shows the blunt instrument swept up more than 900,000 names on a supplemental roll, in a city where the mayor himself said only about 17,000 homeowners out of 8.5 million residents were potentially affected.
That gap between 900,000 and 17,000 is not a rounding error. It is the gap between a government that did its homework and one that did not. As the Associated Press noted, the tax has proven far more complicated to implement than anticipated, in part because of complex ownership structures like trusts and LLCs. Tax expert Gary Bingel of EisnerAmper told the AP, “It seems very simple but the more you dig into it, the more nuances you look at, the more complicated it gets.”
The lower court’s Monday order was not a close call on paper. Judge Ozzi found that the surcharge notices caused irreparable harm. He found the homeowners had demonstrated a likelihood of success on the merits. He ordered the city to remove the supplemental property roll from its website and blocked officials from taking further action based on the roll or the notices already sent. He also stopped the city from enforcing the September 18 deadline for homeowners to file an administrative appeal.
Ozzi emphasized he was not making a final determination. But the findings he did make, irreparable harm, likelihood of success, are the legal markers a court uses when it believes the plaintiffs have a strong case and will suffer real damage if the government keeps acting while the case is pending.
In the courtroom Monday, Mastro laid out the homeowners’ position plainly: “The city screwed this up… got it wrong… stop the train and make them do it over.” He added: “The city is to bear the burden. They didn’t do their homework.”
The city countered that its administrative appeals process gives homeowners a straightforward way to establish primary residence, and that officials may not have access to all the information necessary without additional documentation from owners. That argument asks homeowners to accept the premise that the government can flag them first and verify later, a premise Judge Ozzi rejected, at least at the preliminary stage.
Legal disputes over government actions affecting property rights have become increasingly common, and this case fits a broader pattern of officials pressing forward with enforcement even as courts raise serious procedural objections.
The pied-à-terre surcharge was developed alongside Governor Kathy Hochul and targets homes worth more than $5 million. The Washington Examiner reported that condos and co-ops worth more than $1 million face rates between 4% and 6.5%, while homes above $5 million face rates of 0.8% to 1.3%. Councilwoman Inna Vernikov called the approach “Marxism in practice: consistently promising to better the lives of the middle class by punishing the wealthy.”
Mamdani himself has framed the revenue as essential for schools and public safety. But the rollout has undercut the administration’s credibility. When a city publishes a list of nearly a million homeowners’ names and addresses, people who may have no connection whatsoever to the luxury second-home market, it is not targeting the wealthy. It is casting a net wide enough to catch everyone and daring residents to prove they do not belong in it.
Real estate law professor Stewart Sterk of Cardozo School of Law told the AP: “This is going to be a subject of litigation for quite a while.” That assessment tracks with what has already unfolded. Breitbart reported that some homeowners were incorrectly flagged despite having lived in their properties for years, exactly the kind of error that transforms a policy dispute into a personal crisis for the people caught in it.
Homeowners worried about the safety and value of their properties have reason to pay attention to cases like this. When government institutions act first and verify later, whether through property-related enforcement actions or sweeping new tax mechanisms, the people who bear the cost are rarely the ones making the decisions.
The August 31 court date looms. Homeowners will return to seek permanent relief from the original judge. Mastro told Fox News Digital he remains confident:
“We remain confident that when we are back in court in a mere 18 days, the thousands of New York City homeowners who are now illegally burdened with the responsibility of proving they do indeed live in their own homes will finally get the permanent relief they deserve.”
Meanwhile, the city says it is prepared to move forward with its appeal on an expedited basis. The Mamdani administration extended the deadline for homeowners to seek an exemption, an implicit acknowledgment that the original timeline was unworkable, but has not backed off the surcharge itself. The city maintained that inclusion on the supplemental roll did not mean a property owner would ultimately be subject to the surcharge.
That reassurance rings hollow for anyone who opened a letter from the Department of Finance telling them they might owe a new tax on the home they have lived in for years. The burden was supposed to be on the city. Judge Ozzi said so. The appeals court, for now, has let the city keep shifting it back onto homeowners.
Mastro put the administration’s posture in the sharpest terms available:
“It is, quite frankly, outrageous that this Mayor is so desperate to further his agenda that he’s continuing to try to enforce thousands of surcharge ‘notices’ that are blatantly illegal.”
Government spending priorities continue to generate controversy across the country, from publicly funded facility upgrades to municipal tax experiments like this one. The common thread is an assumption that officials know best how to spend other people’s money, and that the people footing the bill should be grateful for the opportunity.
New York City’s pied-à-terre tax may survive its day in court. But a government that flags 900,000 homeowners to find 17,000 taxpayers is not implementing policy. It is hoping no one notices the difference between precision and a dragnet.
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