Appeals Court Throws Out Lawsuit Over Mamdani’s Second-Home Tax

A New York appeals court has thrown out a homeowners' lawsuit challenging Mayor Zohran Mamdani's pied-à-terre tax rollout, overturning a judge's order that would have forced the city to redo thousands of tax notices and property assessments.

A unanimous four-judge panel of the Appellate Division, Second Department, ruled Wednesday, November 4, 2026, that the homeowners lacked legal standing to sue because they had failed to establish that the city's implementation process caused them a direct injury. New York City can continue preparing to collect the surcharge on high-value second homes.

The decision reverses a September 29 ruling by Staten Island Supreme Court Justice Wayne Ozzi, who ordered the city to restart its tax rollout after finding that finance officials improperly required homeowners to prove their primary residency. Ozzi directed the Department of Finance to withdraw approximately 17,000 notices and remove a supplemental property roll listing more than 900,000 residential properties.

The appellate judges found that receiving a notice about potential tax liability and appearing on a publicly available property roll were insufficient to establish legal injury. Homeowners also claimed they could face legal and accounting expenses to establish their residency, but offered no evidence of actual financial harm.

The dispute began in August when New York City homeowners sued the Mamdani administration, arguing that their primary residences had been swept into the city's effort to identify properties subject to the tax. City officials later determined that the homeowners bringing the lawsuit were exempt, a development the administration cited in seeking dismissal.

Mamdani welcomed the appellate ruling and defended the surcharge as a way to require wealthy second-home owners to contribute more to city services. Randy Mastro, an attorney representing the homeowners, criticized the decision and maintained that the city's approach places an unfair burden on residents who must establish that their homes qualify for an exemption.

The pied-à-terre tax, enacted under New York state law in May, applies to qualifying second homes valued at $5 million or more, as well as condominium and cooperative units valued at $1 million or more. City officials estimate the surcharge could generate approximately $500 million annually.

While the appellate ruling clears the city's implementation process of the homeowners' lawsuit, separate constitutional challenges threaten the tax itself.

Billionaire casino developer Steve Wynn and former U.S. Commerce Secretary Wilbur Ross are among the property owners suing New York state, alleging that the surcharge unlawfully discriminates against nonresidents and burdens interstate commerce. Their lawsuit also challenges the state's authority to impose the additional tax on qualifying properties.

According to their complaint, Wynn faces an additional tax bill of approximately $183,000 on his Manhattan property, while Ross and his wife, Hilary Geary Ross, face more than $83,000 on their New York City cooperative apartment.

The constitutional lawsuit is headed for arguments in December, shifting the legal fight from how New York City administers the surcharge to whether the tax can withstand challenges to its legality.