Appeals court revives Mamdani's pied-à-terre tax, tosses homeowner suit

What happened

A state appeals court in Brooklyn ruled on 11/04/2026 that New York City can move forward with Mayor Zohran Mamdani's pied-à-terre surcharge, a yearly tax on high-value second homes owned by people who do not live in the city. The Appellate Division, Second Department, reversed an earlier ruling by Staten Island Supreme Court Justice Wayne Ozzi. That ruling had found the city mishandled the rollout and would have required the city to restart the process.

The homeowners who sued were told over the summer that they might owe the tax. Some got notices in the mail, and others appeared on a supplemental roll the city posted online. The Daily News reported that the city later used newer tax data and found these owners were exempt, but they kept suing over how the tax was rolled out. Their attorney, Randy Mastro, argued that the city burdened them, and that some consulted lawyers and accountants for no reason. The Daily News reported that the appeals court dismissed the suit because the owners had no legal stake in the outcome. It said they had not shown a harm that was "sufficiently concrete."

Commercial Observer reported that the lower court had objected to a public list covering about 900,000 residential properties that included owners' personal details. It said the appeals panel found owners were not harmed, because assessors already publish much of the same information. Commercial Observer described the ruling as reaffirming that the tax is legal. Mastro said the court "avoided addressing the merits." He also said the tax's constitutionality will be decided next month.

The mayor's office estimates the surcharge will raise about $500 million a year. Gov. Hochul signed it into law as part of the state budget for fiscal year 2027. The city Department of Finance has granted at least 8,800 exemption requests. Other lawsuits in Suffolk County still challenge whether the tax is legal at all. The Daily News said they include suits brought by Steve Wynn and Wilbur Ross. Commercial Observer, citing Bloomberg, said two suits argue the tax discriminates against people who do not live in the city and will proceed in December.