NYC Wins Court Fight Over Pied-à-Terre Tax on Luxury Second Homes

New York City secured a significant legal victory on November 4 when a state Appellate Division panel in Brooklyn reversed a September Staten Island court ruling that had challenged Mayor Zohran Mamdani's pied-à-terre tax. The original ruling found that the city had mishandled the rollout of the surcharge. The city appealed immediately and continued implementing the tax while the litigation proceeded. The appellate court ordered the judgment reversed, the amended petition denied, and the case dismissed.

The tax applies a surcharge to one-, two- and three-family second homes worth more than $5 million, as well as co-ops and condominiums valued at $1 million or more. Mayor Mamdani said in a statement that wealthy property owners had repeatedly tried "every legal avenue available to shield their wealth and avoid contributing more to our city," and that the surcharge asks those who can afford luxury second homes to contribute toward streets, parks and essential public services.

Randy Mastro, the attorney representing homeowners challenging the tax, called it "an unconstitutional surcharge altogether." The tax continues to face additional legal challenges, including one that argues it discriminates against out-of-state owners under the U.S. Constitution.

The pied-à-terre tax was part of the broader affordability agenda Mamdani promoted during his mayoral campaign, which also included freezing rents for rent-stabilized apartments and making city buses fare-free.