Judge orders New York City to restart secondary-home tax rollout; city appeals

A ​Staten Island judge on Tuesday ordered New York City ​officials to mail new notices to homeowners ‌it ​has determined must pay a new tax on secondary homes. The city quickly appealed, invoking a stay that pauses what would have effectively required restarting the rollout of a surcharge on ‌pricey pieds-à-terre.

"With a stay, we will continue implementing the surcharge fairly, efficiently and in full compliance with the law, as we have since day one," Matt Rauschenbach, a spokesman for Mayor Zohran Mamdani, said in a statement. The ruling, which sided with a ‌group of homeowners who had sued the city, came a week before the October 6 deadline for homeowners who had ‌been told they owed the tax to prove they should not be subject to the signature initiative of Mamdani's administration.

In his ruling, Wayne Ozzi, a state Supreme Court justice in Richmond County, said the steps the New York City department of finance took to begin collecting the tax caused "confusion and dismay" ⁠and appeared ​to result from a rush ⁠to fill budget gaps and unfairly put the burden on homeowners to prove properties were their primary residences. Ozzi cited, for example, the release of ⁠what the finance department called a supplemental roll of more than 900,000 properties it said may be subject to the new tax. The ​city also sent letters to 17,000 homeowners informing them they owed the tax.

"No crime is involved here, but homeowners are ⁠being substantially harmed and penalized needlessly," Ozzi wrote. The judge ordered the department to remove the supplemental roll from its website, cancel the 17,000 mailings and ⁠use ​the most recently available tax and other information to determine who owes the tax and to draft new, individualized notices to mail out.

The new tax is expected to generate $500 million annually for the city, America's largest. Last month President Donald Trump ⁠called the tax a "dangerous political experiment" and said he was looking for legal options for the federal government to reverse ⁠it.

On Monday, former US Secretary ⁠of Commerce Wilbur Ross and casino mogul Steve Wynn, who own property in New York City, sued the city over the pied-à-terre tax in a Long Island court, arguing that the ‌tax on secondary homes ‌unconstitutionally discriminates against nonresidents.