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NYC wins court fight over rollout of pied-à-terre tax on luxury second homes
By
Giulia Heyward
Published Nov 4, 2026
Modified Nov 4, 2026
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By
Giulia Heyward
Published Nov 4, 2026
Modified Nov 4, 2026
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New York City has won a legal battle over its new tax on luxury second homes, potentially clearing a hurdle for Mayor Zohran Mamdani's plans to collect hundreds of millions of dollars in new tax revenue.
On Wednesday, a state appeals court reversed a lower court's ruling that had given property owners temporary relief from the new surcharge and dismissed their lawsuit against the tax.
The new pied-à-terre tax is intended to raise revenue from certain high-value properties used as second homes. While Mamdani has said the tax would help fulfill a campaign promise to tax the rich, its rollout has faced significant political and legal hurdles.
The tax has been subject to three separate legal challenges, including claims that the city's rollout would cause “mass confusion” for property owners and that the surcharge unfairly discriminates against wealthy residents.
In September, a Staten Island judge ordered the city to redo notices it had mailed to property owners who might be subject to the surcharge.
Wednesday's ruling marked a victory for the Mamdani administration against the lawsuit, filed by property owners who argued that the new pied-à-terre tax hadn't been properly rolled out.
The appeals court found that the property owners lacked standing to sue because they hadn't shown they suffered a concrete injury from the city's actions. The judges said receiving a tax notice or appearing on a public list of properties potentially subject to the surcharge was not enough to establish such harm.
The court did not determine whether the city had followed every procedure correctly, and the decision does not resolve separate legal challenges to the tax.
In a statement Wednesday, Mamdani celebrated the decision, saying the appeals court had rejected an attempt by wealthy property owners to avoid paying their fair share.
“The pied-a-terre surcharge asks those who can afford luxury second homes to contribute toward the safer streets, cleaner parks and essential public services that every New Yorker deserves,” Mamdani said.
He added that the city would continue defending the tax against ongoing legal challenges.
But Mamdani's claim that the tax will bring in $500 million a year remains in question. The city's Department of Finance has already granted more than 8,800 exemption requests.
Earlier this year, city Comptroller Mark Levine estimated that the tax could generate up to $380 million from roughly 11,200 properties.
David Brand contributed reporting.
This story has been updated with new information.
Tagged
Politics
new york city
Giulia Heyward
Giulia Heyward is a breaking news reporter on the Day-Of desk. She previously worked at NPR, as a breaking news reporter, and the New York Times, as a reporting fellow on the national desk. Her work has also appeared in CNN, The Atlantic and Politico. Got a tip? Email [email protected] or more securely on signal at 917-715-1458.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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