Staten Island judge orders NYC to cancel pied-à-terre tax notices

Why the Staten Island judge rejected the notices

Ozzi sits in Richmond County, which covers Staten Island. That explains the borough’s connection to the ruling; it does not mean Staten Island homes are uniquely subject to the surcharge. His decision concerned how the city identified and notified potential taxpayers, not whether it may tax qualifying second homes.

The homeowners in the rollout case sought a change in that process, not an order abolishing the tax. They argued that people who were not liable should not have to apply for an exemption to correct the city’s initial classification.

Ozzi identified costs and practical risks in that approach, including the time and expense of responding, uncertainty about what documents were required, potential penalties and possible disclosure of confidential information. “Homeowners are being substantially harmed and penalized needlessly by DOF’s method of implementing the tax law,” Ozzi wrote, as reported by Courthouse News Service. DOF is the city’s Department of Finance.

The order requires the city to withdraw the mailed notices and reconsider who should receive new ones. It does not establish that every owner who received a notice is exempt. No date for new notices has been confirmed.

Which properties could face the tax?

The annual surcharge concerns certain New York City properties that are not used as primary residences. The city’s Tax Commission guidance for the 2026–27 and 2027–28 tax years lists a $5 million value threshold for one-, two- and three-family homes, and a $1 million threshold for condominium and cooperative units. Receiving a notice, however, does not by itself establish that an owner owes the tax.

The guidance says a primary residence may be occupied by an owner, a tenant, an immediate family member or, in some cases, a person with a majority interest in the entity that owns the property. It identifies tax returns, residence-related credits and occupancy records among the information relevant to residency. Those requirements help explain why the dispute over who must establish residency has consequences beyond a letter in the mail.

The property-type distinction also matters. When Mamdani and Gov. Kathy Hochul announced the measure in April, their description put the threshold above $5 million for the property types they listed. The Tax Commission’s later guidance gives condos and co-ops a lower threshold; the cited materials do not explain the difference.

Mamdani and Hochul presented the tax as a way to help close the city’s budget gap and protect public services. They projected $500 million in annual revenue. That is an estimate, not an amount shown to have been collected, and neither the ruling nor the pending challenges establishes what the city will ultimately receive.

The separate challenge to the tax

The dispute over the notices is only one legal obstacle. In a Suffolk County lawsuit filed Monday, Steve Wynn and Wilbur Ross argue that the surcharge unconstitutionally singles out people whose primary homes are outside New York City. They also contend that nonresident owners already pay substantial property taxes while using fewer city services. Those are the plaintiffs’ arguments, not court findings.

A separate suit filed Tuesday in New York County includes owners of Manhattan apartments and co-ops who allege that the tax increased their burden without advance notice. Hochul’s office has said she supports the legislation and will defend it in court. City and state officials argue that owners of expensive second homes should contribute to the services the city provides.

The cases pose two distinct questions for the city’s revenue plan: who should receive a tax notice, and whether the surcharge itself can withstand legal challenge. The city says it will seek to pause Ozzi’s order; no stay or ruling on the separate challenges has been confirmed.