The rollout of New York's pied-à-terre tax can proceed for now after an appeals court temporarily put a hold on a Staten Island judge's order blocking the plan.
An appellate court in Brooklyn on Thursday said the city can continue to implement the tax, overruling a
The suing homeowners said the city had caused "mass confusion" with its controversial identification of thousands of properties that it says are potentially subject to the tax on second homes. According to the suit, the city's request for wrongly identified homeowners to apply for exemptions illegally shifts its own responsibility to correctly identify taxable properties.
Justice Wayne Ozzi in Staten Island on Monday put the rollout on hold pending an August 31 hearing in Staten Island. He ordered the city to take down the assessment roll and blocked Mamdani's administration from taking any further action based on it or the mailed notices while the lawsuit continues.
But the city quickly asked for permission to challenge the ruling and an appellate judge, Phillip Hom, blocked Ozzi's order until the higher court decides whether to take up the case.
Both the city and the plaintiffs had pointed to a Sept. 18 deadline for homeowners to apply for exemptions to the tax in arguing their positions. Randy Mastro, a lawyer for the suing homeowners, said in a Thursday court filing that staying Ozzi's order would effectively circumvent it altogether, as any appellate proceeding will continue for weeks.
In a statement after Hom's order, Mastro, former deputy mayor, said, "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 — something the city would know if it would only do its homework."
The levy, signed into law in May by Governor Kathy Hochul, targets single-family homes worth $5 million or more and apartments worth $1 million or more.
Last month, the city's Department of Finance posted an assessment roll online that "includes, but is not limited to, those properties that may be subject to the surcharge." The document included the estimated market values of nearly 1 million residential properties, including hundreds of thousands that appeared to fall short of the threshold for the second-home levy.
The city additionally mailed 17,000 notices to property owners notifying them that they may be liable to pay the tax. Those owners were originally given until Aug. 21 to apply for exemptions, but the deadline was extended to Sept. 18.
The tax's rollout quickly drew backlash from New Yorkers, including homeowners who said it included their longtime primary residences and City Council members who said they'd been caught off guard by the assessment roll's publication.
In a Thursday court filing, the city said it was quickly handling exemption applications, saying it had received 4,300 so far. Nearly half of those applying have already been granted exemptions, the city said, including one of the plaintiffs represented by Mastro.
