Judge Pauses Rollout of N.Y.C. Second-Home Tax, Dealing Blow to Mamdani

The fight over a contentious tax on the second homes of wealthy New Yorkers intensified on Monday when a judge ordered a pause on its rollout, and the administration of Mayor Zohran Mamdani vowed to appeal within hours.

The judge, Wayne M. Ozzi of State Supreme Court on Staten Island, issued a temporary restraining order after a group of homeowners sued the city last week, arguing that the rollout was being mishandled.

The tax, proposed by Gov. Kathy Hochul and backed by Mr. Mamdani, was lauded by supporters as delivering on the mayor’s promise to “tax the rich.” It was supposed to generate some $500 million annually for the city, which faces a budget gap. While the judge on Monday was not asked to rule on the legality of the tax itself, his order threw a wrench into those plans, at least for now.

Matthew Rauschenbach, a spokesman for City Hall, said the city was “confident in both the pied-à-terre surcharge and the city’s ability to implement it fairly and effectively.”

He said the city’s Law Department would appeal the ruling immediately, a step that he said would stay the order.

A spokeswoman for Ms. Hochul, Jen Goodman, said the “lawsuit about the administration of the tax is a matter for the city and the courts to work through.” But she added that Ms. Hochul believes “that people who can afford a multimillion-dollar second home in New York City can afford to pay their fair share.”

The homeowners had argued that New York City officials should have worked harder to determine, using existing records, who might have to pay the tax before publishing a data set on the Department of Finance’s website listing homes that “may be subject to the charge.”

That data set contained nearly one million properties. Justice Ozzi’s order requires the city to remove it from the website for now.

The lawsuit also criticized a decision to send letters to the owners of roughly 17,000 properties informing them that they might be taxed. Homeowners were directed to file paperwork with the city by mid-September if they believed they should be exempt from the tax.

In the courtroom on Monday afternoon, the judge, a Democrat, said that the city had created conditions that met the standard of irreparable harm.

“Sending out notices to 17,000 homeowners who might be subject to a surcharge doesn’t satisfy the intent of the legislation,” he said.

“Notices should state what the records show. They are a treasure trove of information,” he added. “I can’t unring the bell, but I can stop any further notices going out.”

The judge’s order will remain in place until at least Aug. 31, when both sides are expected back in court.

Randy Mastro, a lawyer representing the plaintiffs and a longtime critic of Mr. Mamdani, said in a statement that Justice Ozzi’s decision “vindicated the rights of hundreds of thousands of New York City homeowners who were subjected to a process they never should have been a part of in the first place.”

This is a developing story. Check back for updates.