Appeals court hands Mamdani legal win on NYC luxury second-home tax

New York City Mayor Zohran Mamdani scored a legal victory Wednesday after a state appeals court reversed a lower court ruling that had ordered his administration to redo the rollout of a tax on high-end second homes.

The four-judge panel unanimously dismissed the homeowners’ lawsuit, finding that the plaintiffs lacked legal standing. The decision overturned a September ruling by a Staten Island judge who had ordered the city to restart the tax’s implementation.

The ruling allows Mamdani’s administration to continue implementing the surcharge — also known as a pied-à-terre tax — a key part of his agenda to raise taxes on wealthy New Yorkers and help close the city’s budget gap. 

The tax still faces separate legal challenges.

NYC JUDGE ORDERS MAMDANI TO REDO SECOND-HOME TAX ROLLOUT

The surcharge, approved by the New York state Legislature in May, applies to qualifying second homes valued at $5 million or more for one- to three-family properties and $1 million or more for condos and co-ops. 

The city’s Department of Finance sent initial determination notices to approximately 17,000 property owners in July.

A Staten Island judge ruled Sept. 29 that the city had mishandled the rollout and ordered officials to restart the process. The city appealed while continuing to implement the tax.

The appellate judges found that receiving an initial tax notice or appearing on the city’s property valuation list did not establish sufficient harm to bring the lawsuit. The court also rejected the homeowners’ arguments that the process caused concrete injuries through privacy concerns or the costs of seeking exemptions.

MAMDANI’S LUXURY-HOME TAX ROLLOUT DERAILED FOR NOW AS JUDGE DELIVERS WIN TO NYC HOMEOWNERS OVER MASSIVE LIST

Mamdani welcomed the ruling, accusing wealthy property owners of trying to avoid paying additional taxes.

“From day one, those with the most have attempted to use every legal avenue available to shield their wealth and avoid contributing more to our city,” Mamdani said.

Randy Mastro, an attorney representing the homeowners, criticized the court for dismissing the lawsuit without addressing the merits of their challenge.

“It’s a shame that, after the City admittedly botched the rollout of this surcharge, the court today took the procedural offramp of standing to avoid addressing the merits of this case,” Mastro said in a statement shared with Fox News Digital. “What the City has done here is unconscionable — trying to ensnare thousands of people who don’t owe this surcharge into having to prove they live in their own homes or else have to pay it. 

“But now, this lawless and chaotic data collection scheme will go unremedied.”

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Mastro said the surcharge faces another legal test next month over its constitutionality. Mamdani said his administration would continue defending the law against separate challenges in Suffolk County.