The appeals court on Thursday stayed a lower judge’s temporary restraining order, allowing New York City to resume parts of Mayor Zohran Mamdani’s luxury-home surcharge rollout while the city appeals. Homeowners’ attorney Randy Mastro says the administration improperly shifted the burden to owners to prove a property is a primary residence after publishing a supplemental roll and mailing notices. The Department of Finance sent roughly 17,000 initial-determination notices; the supplemental roll referenced data on more than 900,000 homeowners. Plaintiffs return to trial court on Aug. 31 as the appellate process continues.
Appeals Court Lets Mamdani Resume Luxury-Home Surcharge Rollout While Legal Fight Continues
Mayor Zohran Mamdani during an announcement on municipal grocery stores at a Campaign for Hunger community food distribution center in New York City on July 27, 2026.
An appeals court on Thursday cleared a procedural hurdle that had paused New York City Mayor Zohran Mamdani’s contested luxury-home (pied-à-terre) surcharge, temporarily allowing the city to resume administrative steps while the legal challenge proceeds.
Crowds walk through midtown Manhattan on October 16, 2025, in New York City.
Judge Philip Hom issued an order staying the lower court’s temporary restraining order, removing immediate uncertainty and permitting the Department of Finance and other municipal officials to continue work tied to the surcharge as the appeal moves forward.
Mamdani has made affordability the centerpiece of his administration, with lowering New York's soaring housing costs among his signature promises.
What Happened
Three homeowners’ plaintiffs—Rachel O’Brien, Carmine Morano and Simon Hedley—had challenged the rollout in a lawsuit that argued the Mamdani administration implemented the policy improperly. At the preliminary stage, State Supreme Court Judge Wayne Ozzi had paused the rollout, ordered the removal of a disputed supplemental property roll from the city’s website, and blocked enforcement of deadlines contained in mailed notices while the case progressed.
Brownstone apartments in Manhattan, New York City, United States of America on July 6th, 2024. (Photo by Beata Zawrzel/NurPhoto via Getty Images)
Key Arguments
Homeowners’ attorney Randy Mastro criticized the city, saying the administration "badly botched" the rollout and improperly shifted the burden onto homeowners to prove a property was a primary residence. Mastro described thousands of mailed surcharge notices as "blatantly illegal" and said plaintiffs would seek permanent relief when they return to the trial court.
A New York judge temporarily restrained the Mamdani administration from moving forward based on its disputed property roll and mailed notices tied to the city's new pied-à-terre surcharge.
"The city screwed this up…got it wrong—stop the train and make them do it over," Mastro told the court, arguing the city should have made individualized initial determinations before mailing notices.
The city countered in appellate filings that its notice of appeal and an affirmation of intent to seek permission to appeal triggered an automatic stay under state law, or alternatively asked the appeals court to grant a stay while the appeal proceeds. City attorneys warned that leaving Ozzi’s order in place could disrupt the Department of Finance’s implementation timeline and interfere with property tax bills scheduled to be mailed on Nov. 15.
New York City Mayor Zohran Mamdani speaks during the annual New York State Financial Control Board meeting on Aug. 12, 2026, in New York City. Mamdani joined Gov. Kathy Hochul and other state and city officials for discussions on the budget.
Numbers And Stakes
The Department of Finance sent initial-determination notices to roughly 17,000 property owners, while a broader supplemental roll published online contained information tied to more than 900,000 homeowners. The city says placement on the supplemental roll did not necessarily mean a property would ultimately owe the surcharge.
City officials have projected the surcharge could generate at least $500 million through Fiscal Year 2028. The administration says revenue from the levy on second homes valued at $5 million or more would help fund services including schools and public safety and is part of Mayor Mamdani’s broader affordability agenda.
Next Steps
The homeowners are expected back in trial court on Aug. 31 to seek permanent relief from Judge Ozzi. Meanwhile, the appeals case is proceeding with the City of New York, Mayor Mamdani, the Department of Finance and Finance Commissioner Richard Lee asking the appeals court to overturn or stay the lower-court order; the city has indicated it will pursue the appeal on an expedited schedule.
Spokesperson Matt Rauschenbach said the city disagreed with the lower-court ruling but remained confident in the surcharge’s legality and in the city’s ability to implement it fairly. The appellate order does not resolve the underlying dispute and leaves the central legal questions to be decided in the coming weeks.
Reporting Note: Fox News reporter Maria Paronich contributed to reporting on this story.
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