New York: Mamdani's new luxury-home tax gets back in the game after appeals court lifts judicial block

An appeals court in New York has once again given the green light to the controversial tax on luxury second homes pushed by Mayor Zohran Mamdani, by temporarily suspending the order that had halted its implementation just three days earlier.

Appellate Court Judge Philip Hom put the temporary restraining order issued by Judge Wayne Ozzi on hold, allowing the city to resume the surcharge process while the municipal administration's appeal proceeds. The decision, however, does not resolve the merits of the case, as it is merely a procedural ruling that allows the city to move forward while the case continues to proceed. In other words, the legal fate of the tax remains uncertain.

New Yorkers challenge the proposal

The lawsuit that led to the judicial halt was filed by three New York property owners—Rachel O'Brien, Carmine Morano, and Simon Hedley—who do not challenge Mamdani's tax itself but rather the way in which the Democratic mayor's administration implemented it. Their complaint alleges that the city published a supplemental property list on its website containing information on more than 900,000 properties, and sent notices to about 17,000 property owners requiring them to prove that their homes are primary residences, rather than having the city itself make that determination in advance. One of the plaintiffs, Hedley, ultimately obtained the exemption after submitting the required documentation, which his attorneys cite as proof that the city could have conducted that verification itself before notifying anyone.

In a statement sent to Fox News, Randy Mastro, the attorney representing the plaintiffs, called the notices sent "blatantly illegal" and accused the Mamdani administration of doubling down in court instead of acknowledging errors in the implementation: "It is a shame that the City can't own up to its own mistakes and admit that it has badly botched the rollout of this surcharge (...) Instead, the administration is doubling down, going to court to ensure that it can continue harassing and threatening New York City homeowners who clearly are permanent residents — something the City would know if it would only do its homework."

"It is, quite frankly, outrageous that this Mayor is so desperate to further his agenda that he's continuing to try to enforce thousands [of] surcharge 'notices' that are blatantly illegal," the litigant stated.

The city, for its part, argued before the appeals court that the mere filing of the notice of appeal already triggered an automatic stay of Ozzi's order under state law, and warned that keeping the stay in effect could interfere with the mailing of tax bills scheduled for November 15. According to the municipal Comptroller's own projection, cited in the appeal documents, the new tax will generate at least $500 million for the city through fiscal year 2028.

City Hall spokesperson Matt Rauschenbach had defended the measure following Ozzi's original ruling, noting that the tax is intended to ensure that owners of second homes valued at at least $5 million contribute to city services. Mamdani had insisted that the measure affects only a tiny fraction of New York's 8.5 million residents.

For now, the litigation remains ongoing, and neither side has secured a definitive victory. The city has already announced that it will seek an expedited resolution of its appeal, while the homeowners prepare for their next hearing at the end of the month.