New York City's pied-à-terre tax — a surcharge on high-value properties whose owners maintain a primary residence elsewhere — is moving forward after a Brooklyn appeals court on August 13, 2026, stayed a temporary restraining order that had paused the rollout three days earlier. The decision allows the city to continue implementation pending further appellate proceedings, though a hearing before the original judge remains scheduled for August 31.
The tax was enacted as part of New York State's fiscal year 2026–2027 budget, championed by Mayor Zohran Mamdani and signed into law by Governor Kathy Hochul in May 2026. It took effect on July 1. The levy applies to condominiums and co-operative apartments valued at one million dollars or more, and to one- to three-family homes valued at five million dollars or more, when the owner holds a separate primary residence outside the property. The city projects it will raise five hundred million dollars in revenue.
The surcharge is structured in two phases. In the first two fiscal years, condominiums and co-operatives face rates of four per cent on assessed value for properties up to three million dollars, five point two five per cent for those between three million and five million dollars, and six point five per cent above that threshold. From 2028–2029, the rates shift to zero point eight, one point zero five, and one point three per cent, applied to comparable-sales valuations rather than assessed value.
To identify properties subject to the surcharge, the city mailed notices to approximately 17,000 property owners and published a public lookup list containing over 900,000 names of owners who may fall within its scope. That methodology became the immediate focus of the legal challenge.
On August 7, three homeowners — Simon Hedley, Rachel O'Brien, and Carmine Morano — filed suit in Richmond County Supreme Court, alleging that the city had incorrectly flagged their primary residences and had unlawfully published the 900,000-record list without first determining which properties were actually subject to the tax. Their complaint did not challenge the statute itself, but rather the city's manner of implementing it.
Justice Wayne Ozzi granted a temporary restraining order on August 10, ordering the city to remove the public lookup list and barring it from acting on either the list or the mailed notices. He also blocked enforcement of the exemption deadline. Speaking from the bench, Justice Ozzi said the notices caused irreparable harm because they did not explain to recipients why they had been flagged, and warned that failure to apply for an exemption would result in the surcharge being assessed.
The city filed a notice of appeal the same night the order was issued, arguing under Civil Practice Law and Rules section 5519 — a New York procedural rule providing that certain government appeals automatically stay the order being appealed — that the restraining order was suspended by operation of law. A spokesperson for Mayor Mamdani stated that the city would continue implementation regardless. The Brooklyn appeals court affirmed that position on August 13.
The exemption application deadline, originally set for the end of August, has since been extended to September 18, 2026. Homeowners who miss that deadline may still appeal to the city's Tax Commission by March 2027.
The litigation now proceeds on two tracks. Justice Ozzi will hold a fuller hearing on August 31, at which point the merits of the plaintiffs' rollout challenge will receive closer examination. His eventual ruling, and any further appellate response to it, will determine whether the public list may remain published and whether the notice process must be revised.
A separate and potentially more consequential challenge has not yet materialised. Legal observers have noted that the tax's differential treatment of residential property — applying surcharges based on the owner's residency status rather than the property's character — may conflict with New York State's constitutional uniformity principle, which generally requires that similarly situated property be taxed at similar rates. As of mid-August 2026, no such challenge had been filed. Should one emerge, it would test the statute's foundations rather than the city's administrative methods, and its resolution could take considerably longer than the current proceedings before Justice Ozzi.
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