NYC Mayor Mamdani's pied-à-terre tax says touché after emergency order halts its implementation

A judge in the New York State Supreme Court issued a temporary restraining order overnight, freezing the implementation of the city's new "apartment tax."

The temporary injunction completely freezes the implementation of the "pied-à-terre tax." The decision was made following an urgent lawsuit filed by three city residents, who complained about severe flaws, widespread confusion, and draconian enforcement in the way the reform was introduced.

The list that stirred up the residents

The legal authorization for the new tax was signed in the spring, when the state legislators and New York Governor Kathy Hochul approved the imposition of a levy on vacation homes and apartments. The law applies to private homes valued at $5 million or more, as well as to apartments in shared ownership (co-ops/condominiums) valued at $1 million or more, provided they are not used as a primary residence.

However, the implementation on the ground quickly turned into a managerial embarrassment. The New York City municipality initially published an online database containing about 960,000 potential properties, and later sent around 17,000 official warning letters to homeowners. In these letters, residents were required to apply for an exemption or face five-figure fines and taxes.

The problem: many of the recipients of these warnings were long-time residents who had been living in their properties for decades, and suddenly had to find proof of their residency under a tight deadline.

"Representing the rights of hundreds of thousands of homeowners"

The injunction issued by the judge requires the municipality to immediately remove the list of properties from the internet and prohibits the municipal finance department from taking further enforcement actions, at least until the next hearing scheduled for August 31.

Randy Mastro, the lawyer who represented the plaintiffs and previously served as deputy mayor of New York City, welcomed the decision and harshly criticized the city administration. "We are very pleased with the judge's decision, which protected the rights of hundreds of thousands of New York homeowners who were exposed to a process they should never have been part of in the first place," Mastro said.

On the other hand, the mayor’s office clarified that they have no intention of giving up on the initiative. A spokesperson for Mamdani stated: “We do not agree with the ruling, but we are confident in the municipality’s ability to implement the tax fairly and effectively. The legal department will immediately file an appeal that will delay the order, and the municipality will continue to enforce the law.”

In the meantime, tensions between the residents and the young mayor are only escalating, ahead of the court’s decision at the end of the month.