Judge Halts NYC Wealth Tax Rollout

Ozzi said the city should have made individualized decisions before sending out the notices. In his order, he wrote that no law allowed or required the city to publish the names, addresses and property values of more than 900,000 homeowners, or to publicize the list through what he called an irregular mid-year publication. He also ordered the city to remove the online list and barred officials from acting on the list or the mailed notices while the dispute is being heard.

The lawsuit does not directly attack the pied-à-terre tax itself. Instead, it focuses on the way the Mamdani administration carried out the policy. The surcharge applies to three-family homes valued at $5 million or more and to condos and co-ops valued at $1 million or more when they are not primary residences. The rates climb with property value, reaching as high as 1.3% for qualifying single-family homes above $25 million and 6.5% for qualifying condos or co-ops above $5 million.

The city said it will fight the ruling. Mamdani spokesman Matt Rauschenbach said officials disagree with the decision and remain confident in both the surcharge and the city’s ability to implement it fairly and effectively. He said the Law Department would appeal immediately and argued that the tax asks second-home owners with properties valued at $5 million or more to pay their fair share.

Supporters of the lawsuit welcomed the temporary order. Attorney Randy Mastro said the ruling vindicated the rights of homeowners who were drawn into a process they should never have faced. New York City Councilman Frank Morano also praised the decision on Facebook. His wife, Rachel, and father, Carmine, are among the plaintiffs. The fight now heads toward the Aug. 31 hearing, and the outcome will help determine how far New York City can go in targeting second homes for added tax revenue. For American readers, the case is a reminder that even aggressive local tax schemes must still pass legal scrutiny before cities can force homeowners to pay up.