Richmond County Supreme Court Judge Wayne Ozzi ruled Tuesday that New York City’s rollout of its new “pied-à-terre” tax was procedurally flawed, ordering the administration of Mayor Zohran Mamdani to restart the process. The decision requires the city to remove an online database of approximately 900,000 properties and cancel 17,000 tax notices previously mailed to residents.
The ruling comes just one week before an October 6 deadline for property owners to challenge their status under the new law. Judge Ozzi found that the city violated due process rights by shifting the “burden of proof” onto homeowners to prove they were primary residents, rather than the city first establishing that a property was a second home.
The Automatic Stay and Appeal
Following the decision, the city filed an immediate appeal on Tuesday evening. Under New York law, an appeal by a municipality typically triggers an automatic stay of a judicial order. This legal mechanism allows the Department of Finance to continue its current implementation and collection efforts while the case moves through the appellate courts.
While the ruling rejected the city’s specific rollout methods, it did not strike down the tax policy itself. The “pied-à-terre” tax applies to one-to-three family homes, condominiums, and co-ops with an assessed value of more than $5 million, provided the owner maintains a primary residence outside of New York City.
The plaintiffs in the lawsuit were represented by attorney Randy Mastro. The legal challenge focused on the city’s use of a “supplemental roll” that listed nearly a million properties on a public website, which the judge ordered removed due to privacy and due process concerns.
Impact on Property Owners
The judicial order to cancel 17,000 notices creates immediate confusion for taxpayers who were preparing for the October 6 deadline to respond to city notices. Because of the automatic stay triggered by the city’s appeal, legal analysts suggest that homeowners who received notices may still be subject to city requirements until an appellate court decides whether to uphold or lift the stay.
Mayor Mamdani, who assumed office on January 1, 2026, has defended the tax as a necessary revenue measure for the city. On the same day the judicial ruling was released, the Mayor’s Office was focused on other legislative priorities, including the launch of a municipal strategy to combat antisemitism.
For now, the city is expected to maintain its position that the burden of residency verification lies with the property owners of high-value real estate. If the appellate court upholds Judge Ozzi’s ruling, the city would be forced to issue “individualized initial determinations” for every property it seeks to tax, a process that could delay the collection of hundreds of millions of dollars in projected revenue.
