Mamdani's tax push is faltering: judge orders changes to his controversial tax on second homes

Staten Island Judge Wayne Ozzi on Tuesday ordered New York City to modify the way the socialist mayor Zohran Mamdani administration is implementing its surcharge on certain high-value second homes, ruling that the city's Department of Finance failed to provide affected property owners with adequate due process and even mishandled the process used to determine which properties would be subject to the surcharge. "No crime is involved here, homeowners are being substantially harmed and penalized needlessly by DOF’s method of implementing the tax law," Ozzi wrote.

Ozzi, a Democrat who serves on the state Supreme Court, had already issued a temporary restraining order in August preventing the city from moving forward with the tax. The Mamdani administration appealed that decision, which temporarily prevented the order from taking effect. The lawsuit was filed by a group of New York City homeowners and does not challenge the legality of the tax itself.

According to Ozzi's ruling, the city must replace its current list of properties potentially subject to the surcharge with a more limited list that includes only those homes that actually meet the requirements. Previously issued notices must also be withdrawn, and new notices may only be sent "only after an individualized initial determination." The judge also criticized the notices sent by the Department of Finance to property owners, noting that they "irresponsibly and unnecessarily caused property owners to spend time and money" and, at the same time, "lacked any real guidance on the required evidence."

The second-home tax, which imposes a surcharge on residences in New York City that are not primary residences and are valued at over $5 million, as well as on co-ops valued at $1 million or more, was implemented as part of Mayor Zohran Mamdani's 2027 fiscal budget in an effort to close the city's budget deficit. Far from speaking out against it, New York's Democratic governor, Kathy Hochul, went so far as to endorse the initiative—a move many saw as a sign that the party's most radical factions and ideas are beginning to take hold.