September 30, 2026
On September 29, 2026, in response to a challenge brought by New York City homeowners, Staten Island Justice Wayne M. Ozzi struck down the City’s pied-à-terre tax rollout. But at least portions of the decision will be automatically stayed as the City appeals.
What did the homeowners challenge?
The homeowners challenged how the New York City Department of Finance (“DOF”) carried out the new pied-à-terre surcharge, not whether the tax is lawful (though two new suits were recently filed also challenging the tax’s lawfulness). The surcharge applies to homes worth more than $5 million, and co-ops and condos worth more than $1 million, that are not the owner’s primary residence. In their petition, the homeowners took issue with the publication of a “Supplemental Roll” of more than 900,000 properties, 98–99% of which owe nothing, and the mailing of about 17,000 notices telling owners they might owe the surcharge unless they applied for an “exemption.”
What did the court decide?
Staten Island Justice Wayne Ozzi ruled for the homeowners on both claims.
The Supplemental Roll was improper because it was “nonsensical to conclude that the legislature mandates that a change to the tax status of less than 17,000 properties requires a re-publication of essentially the entire residential tax roll of over 900,000 properties.” DOF, he wrote, took “the lazy route.”
The notices were also improper, because the statute requires DOF to decide primary residence “based on information available to” it. Tax Law § 1352(a)(1); Admin. Code § 11-3203(a)(1). According to Justice Ozzi, DOF never made individualized determinations and refused to use 2024 tax returns, which made its actions “arbitrary and capricious.” The process also shifted the burden to homeowners to prove they live in their own homes, which violated their due-process rights.
What did the court order?
DOF must take down the roll, though it may post a limited list of properties actually subject to the surcharge. It must cancel every notice already mailed. It may send new notices only after individualized determinations that state the factors and records relied on. And the “exemption” process is “eliminated as it improperly shifts the burden.”
Does the City’s appeal automatically stay the order?
In part. Service of a notice of appeal by the City or one of its agencies automatically stays proceedings to enforce the order. C.P.L.R. 5519(a)(1). The City filed one the same day.
But the automatic stay reaches only orders that command action. Pokoik v. Dep’t of Health Servs. of Cty. of Suffolk, 220 A.D.2d 13, 15 (2nd Dep’t 1996) (“scope of the automatic stay of CPLR 5519 (a) is restricted to the executory directions of the judgment or order appealed from which command a person to do an act,” and “a motion decided by an order does not become undecided and the declaratory provisions of a judgment are not undeclared when a governmental party serves a notice of appeal therefrom”).
Taking down the roll and canceling notices are commands, so the stay likely covers them. The rulings that the notices were unlawful and that the exemption process is eliminated are declarations. Whether the City can keep running that process during the appeal may give rise to additional litigation.
The Appellate Division, Second Department, can vacate or limit the stay. C.P.L.R. 5519(c). The homeowners’ counsel, Randy Mastro, who served as first deputy mayor under Mayor Eric Adams and is now a partner at Dechert LLP, has said he will ask the Second Department to vacate any stay.