Judge Orders NYC to Start Over on Mamdani Pied-à-Terre Tax Rollout

A Staten Island judge has ordered New York City to start over on Mayor Zohran Mamdani’s pied-à-terre tax rollout after finding that officials improperly shifted the burden onto about 17,000 property owners to prove their homes were primary residences.

New York State Supreme Court Justice Wayne Ozzi ruled Tuesday, September 29, 2026, that the Department of Finance must make new residency determinations using information already available to the city before sending revised notices. He also ordered the agency to remove a supplemental property roll covering more than 900,000 residential properties.

New York City immediately appealed, triggering a stay that allows the Finance Department to continue the existing rollout while the Appellate Division reviews Ozzi’s decision.

Ozzi left the pied-à-terre tax itself in place. His 22-page ruling struck at the process the Finance Department used to identify properties that could be subject to the surcharge.

State law requires the department to review available information and determine whether a qualifying property is being used as a secondary residence before requiring an owner to respond. Ozzi found that the city reversed that sequence by sending notices that required homeowners to establish their residency first.

“The refusal to use the tax data that was ‘sufficiently available’ to DOF unfairly shifted the burden to thousands of homeowners to prove their basic residency,” Ozzi wrote.

The judge said the process could force some owners to hire lawyers or accountants simply to establish where they live. Revised notices must rely on the city’s available records and identify the information supporting the Finance Department’s determination.

Ozzi also directed the department to replace the supplemental roll, if his order takes effect, with one limited to properties it has actually determined are subject to the surcharge.

Rachel O’Brien, Carmine Morano and Simon Hedley sued the city, Mamdani and finance officials in August after their homes were included in the rollout. O’Brien and Morano said their Staten Island properties were their primary residences, while Hedley said his Manhattan home had been his primary and only residence for more than a decade.

Ozzi initially restricted parts of the rollout on August 10, including the city’s use of the notices and supplemental roll. An appellate judge later allowed the city to resume implementation while the homeowners’ challenge continued.

The surcharge targets certain high-value New York City homes used as secondary residences. During its first two years, it can apply to one-, two-, and three-family homes valued at $5 million or more and qualifying condominium and cooperative units valued at $1 million or more. The tax took effect May 28 and is expected to generate as much as $500 million annually.

Mamdani spokesman Matt Rauschenbach said the administration disagrees with Ozzi’s ruling and will continue defending the surcharge. The Finance Department is still directing recipients to submit exemption applications by October 6 while the appeal proceeds.