New York: judge blocks tax on second homes. Mamdani: let’s press ahead

The appeal did not challenge the substance of the tax measure, but argued that Mamdani’s administration had handled its implementation inadequately, causing ‘great confusion’ through the ‘questionable’ identification of thousands of properties potentially subject to the second-home tax. The three claimants – Rachel O’Brien, Carmine Morano and Simon Hedley – claimed that they had wrongly received the payment notice.

Furthermore, according to the writ of summons, the council’s requirement – which obliges owners who have been incorrectly identified to apply for exemption from payment – would shift onto citizens a burden that should instead fall on the council, namely that of correctly identifying the properties on which the tax is due.

Mamdani’s spokesperson, Matt Rauschenbach, stated that the city would immediately appeal against Ozzi’s ruling. “We do not agree with the judge’s decision, but we are confident in the legitimacy of the additional tax on second homes, and in the city’s ability to apply it fairly and effectively”, explained Rauschenbach, emphasising that the tax simply asks those who own high-value second homes and enjoy the city’s benefits to make a contribution.

Last month, the city’s Department of Finance published online an initial list of property valuations – based on available information, such as tax returns, deeds of sale and other official documents – which ‘includes, by way of example but not limited to, properties potentially subject to the second-home tax’. The document sets out the estimated market values of nearly one million residential properties, including thousands of properties that do not appear to meet the threshold for the second-home tax. This was one of the reasons why Judge Ozzi ordered the mayor to withdraw the list.

The city council has also sent 17,000 notices by post to property owners, informing them that they may be required to pay the tax. These property owners have been given until 18 September to apply for any exemptions.

The case was handled, on behalf of the three landlords, by lawyer Randy Mastro, an opponent of Mamdani and former deputy mayor of New York under the previous administrations of Eric Adams and Rudy Giuliani. Mamdani made a scathing comment on Mastro’s activism, noting that, in another appeal on behalf of a group of property owners, Mastro had called for the rent freeze approved in June to be overturned. “You know, there are few certainties in New York City: death, taxes and Randy Mastro bringing a lawsuit against this administration,” the mayor said. “We are therefore ready to vigorously defend our city’s position in court, just as we have done in previous cases he has brought and, I am certain, will continue to do so in those he will bring in the months and years to come,” added Mamdani, reaffirming his commitment to using the revenue generated by the additional tax on second homes to “fund safer roads, safer schools and the city that New Yorkers deserve”.