Mamdani’s pied-à-terre tax unpaused after surprise ruling — but legal showdown isn’t over yet

The pause is on pause.

Mayor Zohran Mamdani’s stumbling pied-à-terre tax rollout is back in effect after a surprise appeals court ruling on Thursday — but the fight isn’t over yet.

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The appellate court decision only temporarily lifts a restraining order on the tax issued by a lower court on Monday, allowing City Hall to continue with the botched rollout until the full appeals panel considers the case.

Associate Justice Philip Hom of the Brooklyn Appellate Division signed the order Thursday.

In opposition papers filed Thursday in the appeal case, former first deputy mayor Randy Mastro — representing three peeved city homeowners suing the city over the rollout — called the Mamdani administration’s attempted end-run to keep implementing the tax is “an astonishing display of chutzpah.”

“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 after the appeals court order was issued. “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 — something the City would know if it would only do its homework.”

The city, he said in the court papers, is “compounding their illegal conduct by going to extraordinary lengths to avoid a three-week pause in their harassment campaign of New York City homeowners, all done in their zeal to impose a Surcharge that does not have to be invoiced until November 15, 2026 and collected until January.”

Mastro’s filing accused the city of “negligence, laziness or intentionality” in ignoring the data at their fingertips to make these tax determinations prior to the scattershot of mailed notices, suggesting that the city may have intentionally hoped to rake in extra cash over a failure to file an exemption by the deadline.

Here’s the latest drama on Zohran Mamdani’s pied-à-terre tax rollout:

• Mamdani’s pied-à-terre tax unpaused after surprise ruling — but legal showdown isn’t over yet
• Manhattan rents reach all-time high of $6,655/month amid Mamdani’s rent freeze and pied-a-terre tax threat
• Hochul tries to distance herself from Mamdani’s bungled rollout of her pied-à-terre tax — and it could haunt her: insiders
• Meet the NYers fighting Mamdani’s pied-à-terre tax in court: ‘The city botched this’
• Trump rips Hochul, Mamdani pied-à-terre tax as ‘amateur hour’ that’ll ‘ruin’ NYC

“The only reasonable explanation is that the City is trying to ensnare thousands more New York City residents who are not liable for this Surcharge into having to pay it anyway,” Mastro wrote Thursday in a court filing.

“You can’t terrorize first and then clarify,” Mastro said in the hearing, “which is exactly what the city is trying to do.”

Staten Island Supreme Court Judge Wayne Ozzi himself raised that very concern in court as he delivered his ruling on Monday that the city may have violated the statute by not doing required due diligence prior to sending notices. 

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“So if they surcharge people who are surcharged only because they didn’t file for an exemption, I don’t think that’s appropriate,” the judge said, according to a transcript.

City attorneys claim that the pause will ultimately cause massive headaches to taxpayers, since Gov. Hochul only signed the bill into law in late May, with stipulations and deadlines for when the city’s finance department’s rollout of the tax can occur.

Corporation counsel Steve Banks also cited the “sorely needed revenues for the City to help close its generational budget gap” as a harm that could result from the order.

Banks argued the appeals court should confirm what the city has already stated as fact: that their move to appeal automatically triggered a stay of the lower court proceedings — including the restraining order — and that they would proceed with the roll-out as if nothing happened.

The lawsuit filed last Friday argued that Mamdani’s tax rollout violated the new state law allowing for the tax because city officials ignored the plethora of state data that the statute specifically granted them to make an accurate assessment of who could be eligible.

In reality, the suit claims city officials left that assessment to New Yorkers, burdening them to prove their city bona fides within a since extended one-month deadline.

Two of the suing homeowners — Rachel O’Brien and Carmine Morano, the wife and father of City Councilman Frank Morano — are Staten Island residents and had their homes listed on the published tax roll alongside nearly every other property in the city.

A third homeowner in the suit, Chelsea resident and self-declared Mamdani supporter Simon Hedley, received one of the 17,000 mailed notices, according to the filing.

Hedley has since been granted an exemption, applying for one after the lawsuit was filed.

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City Hall did not immediately respond for comment.