NY judge issues temporary restraining order on city’s pied-à-terre surcharge rollout
A Manhattan judge halted New York City’s implementation of a tax on luxury second homes, ordering the removal of a list that disclosed owners’ names, addresses and property values and blocking further enforcement pending a full hearing.
A New York State judge issued a temporary restraining order on Monday that stops the city from proceeding with its newly introduced surcharge on high-value secondary residences. The order requires the removal of a supplemental property roll that listed more than 900,000 homeowners’ names, addresses and assessed values, and bars the city from assessing, collecting or sending notices about the tax until it makes an individualized determination required by state law.
The lawsuit was brought by three homeowners who contend that the city failed to verify whether the properties were non-primary residences before mailing notices, thereby shifting the burden of proof onto owners. The plaintiffs argue that the city’s approach violated statutory procedures and caused “irreparable harm” by publicly disclosing personal information.
"The city screwed this up… got it wrong… stop the train and make them do it over," attorney Randy Mastro told the court, criticizing the rollout.
City attorneys defended the process, saying that halting it would disrupt taxpayers seeking exemptions and interfere with statutory deadlines. They maintain that the surcharge, which applies to second homes valued at $5 million or more, is lawful and intended to generate revenue for city services.
"We disagree with today’s ruling, but we are confident in both the pied-à-terre surcharge and the City’s ability to implement it fairly and effectively," spokesperson Matt Rauschenbach said, adding that the city will appeal the order.
Judge Wayne Ozzi found that the plaintiffs were likely to succeed on the merits because the city had not performed the required individualized determinations and that the notices caused irreparable harm. He noted that while the order cannot undo notices already sent, it can prevent further mistakes. The court set deadlines for the city to submit a show-cause brief by Aug. 24, with plaintiffs’ responses due Aug. 27, and scheduled oral arguments for Aug. 31.