Appeals court reboots NYC pied-à-terre tax rollout after pause
New York City’s ultra-rich started the week with a reprieve from having to prove residency to avoid a pied-à-terre tax. But as the week ends, the reprieve itself proved fleeting.
A state appeals judge yanked back the roadblock on Mayor Zohran Mamdani’s tax plan Thursday afternoon in a Staten Island court. Brought by three homeowners, the lawsuit that triggered the pause is now showing cracks.
In its appeal, the city’s attorneys noted that one of the homeowners suing, Simon Hedley, filed his own administrative appeal a day after the lawsuit began.
“The Department has approved his appeal,” the city’s court filing states, adding that Hedley “does not have standing to seek relief from the deadline for filing an administrative appeal” and that his “voluntary action has mooted any claim for relief.”
Randy Mastro, the attorney representing the plaintiff homeowners, remains undaunted.
“It is a shame that the city can’t own up to its own mistakes and admit that it has badly botched the rollout of this surcharge,” Mastro said in a statement to Fox News Digital. “Instead, the administration is doubling down, going to court to ensure that it can continue harassing and threatening New York City homeowners who clearly are permanent residents.”
Thursday’s appeals court order doesn’t touch the surcharge’s legality. Mastro’s suit never challenged the tax itself, only how the city rolled it out. That fight is still ahead.
A familiar adversary
This isn’t Mastro’s first fight with Mamdani’s City Hall this year. He’s also co-counsel for a coalition of landlords suing the city’s Rent Guidelines Board over June’s rent freeze on roughly a million stabilized apartments. They argue Mamdani stacked the board to deliver on a campaign promise.
That fight escalated Thursday, too. Tenant advocacy groups Tenants and Neighbors and the Metropolitan Council on Housing filed a brief defending the freeze. They argue few landlords are affected and that landlords wrongly assume the board must raise rents if any owners are struggling. They want the case dismissed outright.
Other tenant groups are joining in, filing briefs with the court today.
Mastro served as first deputy mayor under Eric Adams, who dropped his own reelection bid this year and endorsed Andrew Cuomo over Mamdani. Mastro held the same title decades earlier under Rudy Giuliani.
Mamdani’s team, meanwhile, just cleaned up one of Adams and Mastro’s own decisions. In June 2025, the pair killed a decade-old plan to build low-income senior housing at the Elizabeth Street Garden. The developers sued.
This week, the Gothamist reported that Mamdani’s administration settled that suit. The deal drops the litigation in exchange for a new housing site on public property elsewhere in the city and preserves the garden.
A plaintiff’s exemption undercuts the case
Hedley is one of three plaintiffs suing the city. He was also the only one who’d received a surcharge notice.
A day after suing, Hedley filed his own administrative appeal. The city quickly approved it. His apartment is his primary residence, and he’s exempt from the tax entirely.
Mastro rejects the city’s mootness argument. He says Hedley’s fast approval proves the city should have made that call before sending the notice, not after.
What the stay resolves
Thursday’s order is procedural. It doesn’t rule on the merits. It just lets the city keep working.
The city’s finance department can keep sending notices. It can process the roughly 4,300 administrative appeals already filed. It can also enforce the Sept. 18 residency-proof deadline.
Mastro called the city’s notices “blatantly illegal.”
“We remain confident that when we are back in court in a mere 18 days,” Mastro said, homeowners “illegally burdened” with proving residency “will finally get the permanent relief they deserve.”
What’s next
The case returns to the Staten Island court on Aug. 31 for a hearing on the underlying petition. The city says it’s ready to move quickly.
Timing is tight on both sides. The finance department faces a Nov. 15 deadline to mail tax bills, surcharge included. The first installment is due Jan. 1, 2027. The city comptroller projects roughly $500 million in surcharge revenue through fiscal 2028.
That money matters. Mamdani’s administration is counting on it to help close a nearly $12 billion budget gap. Every week of delay narrows the runway.
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