Staten Island Judge Halts NYC's "Pied-à-Terre" Tax Rollout Over Flawed Notice Process

STATEN ISLAND, N.Y. — A New York Supreme Court judge temporarily blocked New York City from enforcing its new tax surcharge on high-value second homes, siding with three homeowners who say the city wrongly identified their primary residences as potential targets of the levy.

Justice Wayne M. Ozzi issued the temporary restraining order Aug. 10, days after homeowners Simon Hedley, Rachel O'Brien and Carmine Morano filed a petition in Richmond County against the city, Mayor Zohran Mamdani, the Department of Finance and Finance Commissioner Richard Lee. The order requires the city to take down its public "Supplemental Roll" — a list of more than 900,000 residential properties the city had published in connection with the new surcharge — and bars officials from sending further notices while the case proceeds. The next hearing is set for Aug. 31.

The pied-à-terre tax, created in this year's state budget to help close the city's roughly $500 million deficit, applies to one-, two- and three-family homes valued above $5 million and condos or co-ops valued above $1 million that don't serve as an owner's primary residence. To identify affected properties, the Finance Department mailed notices to roughly 17,000 homeowners flagging them as potentially subject to the surcharge and giving them until an initial deadline, later extended to Sept. 18, to prove otherwise.

According to the petition, Hedley, O'Brien and Morano all actually live full-time in the homes the city flagged, and argue the notice process improperly shifted the burden onto homeowners to disprove liability rather than requiring the city to establish it in the first place. Their suit does not challenge the underlying legality of the surcharge itself, focusing instead on how the rollout was carried out.

At the hearing, Ozzi found the notices caused irreparable harm because they didn't explain why specific homeowners were flagged, while warning that anyone who failed to file for an exemption would face the tax. The city filed a motion for permission to appeal shortly after the ruling, which stays the order at the lower court level; a mayoral spokesperson said the administration would continue moving forward with the tax's implementation.

The case is O'Brien, Rachel, et al. v. The City of New York, et al., New York Supreme Court, Richmond County, index number 85217/2026. Case docket: https://trellis.law/case/36085/85217-2026/o-brien-rachel-et-al-v-city-new-york-et-al