Mayor Zohran Mamdani’s administration was dealt a blow Tuesday as a judge ruled the city must scrap its bungled rollout of the new pied-à-terre tax and start anew.
The decision by Staten Island Supreme Court Justice Wayne Ozzi is a major setback for one of the mayor’s signature policies – and comes as casino mogul Steve Wynn and former Commerce Secretary Wilbur Ross joined the legal fight to halt the tax.
The city was both “arbitrary” and “capricious” when it mailed notices to several New Yorkers who were not actually meant to be subject to the tax on luxury second homes in the Big Apple, Ozzi ruled.
All of the thousands of notices must be “cancelled,” and the city Department of Finance must start from scratch and resend them on an individual basis, Ozzi ruled.
The tax, approved by Gov. Kathy Hochul and the state Legislature, is meant to apply to 1-to-3 family homes worth at least $5 million and co-ops and condominiums valued at $1 million or more that are unoccupied, non-primary residences.
Randy Mastro, who filed the suit on behalf of Staten Island homeowners, hailed the decision — which the administration will likely appeal — as a victory.
“We’re gratified that the court has recognized we were right all along. The fact is that this administration failed to follow state law when it burdened New York City homeowners with proving they live in their own homes or be on the hook for paying a new surcharge,” Mastro said.
“Now the administration must go back and do what it should have done from the start: use all the information at its disposal to make an individualized ‘initial determination’ about who truly owes this surcharge before demanding that they pay it.”
The city didn’t immediately comment.
Ozzi’s ruling came as Wynn, whose main residence is in Palm Beach, Florida, filed a new suit in Suffolk County claiming that the tax was “unconstitutional.” Wynn received notice in July that he was due to pay a $183,000 surcharge on his Manhattan property, the state suit filed Monday claims.
The Mamdani administration has said that the tax would raise more than $500 million a year to help fund schools, libraries and other essential public services.
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