New York Mayor Zohran Mamdani can proceed with the introduction of the controversial pied-à-terre tax on luxury second homes. A state appeals court on Wednesday overturned a lower court ruling that had previously faulted the city administration for flawed implementation when introducing the surcharge.
In September, a Staten Island judge had ruled that the special levy on high-value second homes unlawfully burdened owners by placing the burden of proving primary residence status on them. In addition, the publication of a list of around 900,000 residential properties containing owners' personal details had faced criticism. Lawyer Randy Mastro is representing the plaintiff property owners in these proceedings.
Legality of publication confirmed
The panel of appeals court judges has now ruled that the tax is lawful and that the owners suffered no harm from the publication of the list. The data contained in it largely corresponded to the information that local tax authority assessors publish regularly in any case. Consequently, the judges found no procedural violation by the authorities.
The second-home levy is based on a draft by Mamdani and was signed into law in May by Governor Kathy Hochul. The rule applies to single-family homes valued at $5 million or more, as well as condominiums and cooperative shares, known as condos and co-ops, valued at at least $1 million.
Reactions and pending lawsuits
Following the ruling, Mayor Mamdani stated that the court had dismissed an attempt by wealthy circles to evade paying their share and ruled in favour of the city. Plaintiffs' representative Mastro countered that the appeals court had avoided examining the actual substantive issues of the case. He announced plans to pursue the legal battle on behalf of his clients.
Despite this legal victory, the rollout is not without risks. Two further lawsuits against the state claim the levy is unconstitutional, arguing that it discriminates against owners whose primary residence is not in New York City, as reported by Bloomberg. Hearings in these proceedings will resume in December.
