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NYC wins appeal, keeps pied-à-terre tax rollout

NYC wins appeal, keeps pied-à-terre tax rollout

Rule Changes New York, NY local

A state appeals court ruled for the city in November, leaving the surcharge in place; separate lawsuits against the tax itself continue.

November 2026: Appeals court rules for NYC

Overview

Updated 6 days ago

A New York state appeals court ruled for the city in November, leaving the pied-à-terre tax rollout in place. The court had frozen a lower-court ruling that voided the rollout, and the city kept collecting while the appeal was pending.

The surcharge applies to non-primary homes over $5 million, and to co-ops and condos over $1 million. Mayor Zohran Mamdani says it could raise $500 million a year. First bills go out Nov. 15 and are due Jan. 1, 2027.

Why it matters

The surcharge is still being collected after the city won its appeal; a later ruling against the tax itself could reopen the city's budget gap.

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Key Indicators

17,000
Notices sent to owners
Warnings mailed in July that a judge ordered withdrawn; the order was frozen and then reversed on appeal.
900,000
Properties on the supplemental roll
The city's list of properties that 'may be subject' to the tax; 98–99% owe nothing.
$5M
Value threshold for most homes
The surcharge applies to non-primary residences over $5 million, and co-ops/condos over $1 million.
5,700
Exemption applications approved by Oct. 11
About 5,700 applications had been approved out of roughly 10,000 submitted, according to Department of Finance figures reported by the New York Post.
$500M
Annual revenue Mamdani projects
The mayor says the tax could raise $500 million a year.

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People Involved

WO
Wayne M. Ozzi
Richmond County Supreme Court Justice
Ruled the rollout unlawful; his order was frozen on appeal and the appellate court ruled for the city in November 2026.
 Zohran Kwame Mamdani
Zohran Kwame Mamdani
Mayor of New York City
Won the appeal over his rollout; the tax remains in effect while other challenges continue.
 Randy Mastro
Randy Mastro
Homeowners' counsel, partner at Dechert
Lost the appeal; the rollout continues.
 Kathy Hochul
Kathy Hochul
Governor of New York
Backed the tax at the state level
 Justice Ford
Justice Ford
Appellate Division, Second Department Justice
Rejected Mastro's request to vacate the automatic stay; the appellate court later ruled for the city.

Organizations Involved

New York City Department of Finance
New York City Department of Finance
City agency
Won the appeal; the rollout continues.

The city agency that administers property taxes and mailed the contested notices.
New York City Mayor's Office
New York City Mayor's Office
Executive office
Won the appeal; the rollout continues.

Designed the tax rollout as part of the fiscal 2027 budget and now oversees the appeal.

Timeline

July 2026 November 2026

8 events Latest: November 2026
Tap a bar to jump to that date

  1. Appeals court rules for NYC

    Latest Legal

    The Appellate Division, Second Department ruled in the city's favor, leaving the pied-à-terre tax rollout in place. The court had frozen Justice Wayne Ozzi's Sept. 29 order while it reviewed the case.

  2. Exemption deadline moved to Oct. 13

    Administrative

    City moved the exemption application cutoff from Oct. 6 to Oct. 13. First bills go out Nov. 15 and are due Jan. 1, 2027.

  3. Appeals court freezes Ozzi's order

    Legal

    The Appellate Division, Second Department froze the Sept. 29 ruling, letting the city continue its rollout. Justice Ford rejected Mastro's request to vacate the stay.

  4. Judge voids rollout; city appeals

    Legal

    Ozzi orders all notices cancelled and the roll removed; city appeals that day, invoking automatic stay.

  5. First residency deadline passes

    Administrative

    Original deadline for owners to file proof of primary residence.

  6. City approves residency proofs

    Administrative

    City has approved roughly 4,700 proofs of residency and is reviewing thousands more.

  7. Judge pauses rollout

    Legal

    Ozzi issues a temporary restraining order halting the rollout; city appeals and stays it.

  8. City mails luxury-home tax notices

    Legal

    Finance Department mails 'may be subject' notices to about 17,000 owners; publishes a 900,000-property roll.

Scenarios

1

Appeals court upholds Ozzi; city rebuilds rollout

Likely Resolves by Q1 2027

Discussed by: HousingWire; DNYUZ citing tax attorneys at Herrick Feinstein

The Appellate Division, Second Department rejects the city's appeal, and the order takes effect. The Finance Department must cancel all notices, remove the supplemental roll, and make individualized residency determinations using 2024 tax returns before sending new notices. Tax attorneys note the city faces a heavy logistical lift — sending bills in time for November deadlines — with uncertain resources.

2

City wins appeal; original rollout resumes

Possible Resolves by Q1 2027

Discussed by: Commercial Observer; Schlam Stone & Dolan LLP

The automatic stay keeps the exemption process running while the appeal proceeds, and the appellate court reverses Ozzi. The 17,000 notices and the 900,000-property roll stand, and the city keeps its extended October 6 residency deadline. Legal commentary notes the automatic stay covers the order's commands (removing the roll, canceling notices), so these actions pause regardless of the appeal's merits.

3

Challenges strike down the tax itself

Possible Resolves by Q2 2027

Discussed by: Schlam Stone & Dolan LLP (noting two new suits filed)

Two newly filed lawsuits challenge the surcharge's lawfulness, not just its rollout. If a court holds the tax unconstitutional — for example, on equal-protection or due-process grounds — the surcharge disappears entirely. That would reopen the budget gap the tax was meant to close and force the city and state to find replacement revenue.

4

City wins appeal; rollout continues

Deadline passed (Nov 4, 2026)

Discussed by: Gothamist

The Appellate Division ruled for the city in November 2026, leaving the original rollout in place. The city can keep collecting the surcharge while separate lawsuits against the tax itself proceed.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

February 2019

New York's abandoned 2019 pied-à-terre tax

Gov. Andrew Cuomo proposed a pied-à-terre tax on non-primary homes over $5 million to fund subway repairs. Developers and luxury brokers mounted fierce opposition, warning the surcharge would drive wealthy buyers away.

Then

The proposal was dropped from the budget within months.

Now

It set a precedent that taxing pieds-à-terre in New York draws intense and organized resistance.

Why this matters now

The 2026 tax revives the same policy with similar thresholds. New York is now testing whether enforcement mechanics, not just the policy idea, can survive court scrutiny.

2016–2017

Vancouver's Empty Homes Tax (2017)

Vancouver imposed a tax on residential properties not used as a principal residence, relying on owners to self-declare occupancy each year. The city built a compliance system around owner-submitted declarations.

Then

The tax survived but produced years of disputes over assessments, vacancy status, and appeals.

Now

It became a model for other cities taxing empty or non-primary homes, and a cautionary tale on administrative burden.

Why this matters now

New York borrowed the self-declaration model and hit the same wall Vancouver did: shifting the burden of proof onto owners instead of using municipal records, which courts and owners challenged.

Sources

(19)
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CNN Realtor.com HousingWire InvestmentNews RNZ Commercial Observer Schlam Stone & Dolan LLP Law Commentary 6sqft DNYUZ Investing.com / Economy News Briefs.co Inman The City Reporter Brownstoner Thomson Reuters Holland & Knight Gothamist Weekly Real Estate News