NEWYou can now listen to Fox News articles!
A New York judge slammed the brakes Monday on Mayor Zohran Mamdani’s controversial rollout of a new tax on luxury second homes, ordering City Hall to take down a controversial list exposing the names, addresses and property values of more than 900,000 New York City homeowners.
Judge Wayne Ozzi temporarily restrained the Mamdani administration from moving ahead based on the disputed property roll or mailed notices and barred the city from enforcing its looming deadlines against homeowners caught up in the rollout.
The signed order also prevents the city from imposing, assessing or collecting the surcharge against homeowners identified on the supplemental roll or sending a notice without first making the individualized determination and providing the notice required under state tax law.
MAMDANI EXTENDS DEADLINE FOR NYC HOMEOWNERS TO SEEK EXEMPTION FROM NEW PIED-À-TERRE TAX
The courtroom setback came after attorney Randy Mastro blasted the Mamdani administration over what he called a botched rollout of a surcharge targeting second homes valued at more than $5 million.
“The city screwed this up… got it wrong… stop the train and make them do it over,” Mastro told the court.
Mastro argued that the city was supposed to first determine whether properties actually qualified as non-primary residences before putting homeowners through the surcharge process.
Instead, he said, the administration published a supplemental property roll covering a vast number of properties and sent notices that left New Yorkers scrambling to prove their homes were their primary residences.
MAMDANI WARNING TO WEALTHY NEW YORKERS ABOUT ‘FAIR SHARE’ SPARKS ONLINE FIRESTORM: ‘FULL BLOWN COMMUNIST’
“The city is to bear the burden,” Mastro argued, accusing officials of failing to use available information to determine which properties actually qualified. “They didn’t do their homework.”
Mastro said the publication of property owners’ names, addresses and property values unleashed confusion and public backlash.
“This is ludicrous. It is not right,” he told the court, arguing that the disclosure effectively “doxx[ed]” homeowners.
Outside the courthouse, Mastro declared the ruling “a very good day for all New York City homeowners.”
NYC MAYOR MAMDANI CALLS THREAT OF RICH PEOPLE LEAVING NYC OVER TAXES ‘IMAGINED’
“The Mamdani administration botched this rollout,” Mastro said, alleging the city sent letters to thousands of people who live in their own homes and “never should have received a letter suggesting they may be subject to the surcharge.”
He also accused the city of posting a list of “over 900,000 New Yorkers by name, address and property value.”
“That’s a pretty shocking thing that happened,” Mastro said.
The lawsuit was filed by three New York City homeowners who are not challenging the legality of the pied-à-terre surcharge itself, but rather how Mamdani’s administration implemented it.
MAMDANI’S WALL STREET COURTSHIP SPARKS CRITICISM OF ANTI-BILLIONAIRE AGENDA
They allege the city incorrectly identified their primary residences as potentially subject to the surcharge, failed to conduct the statutorily required individualized initial determination before mailing notices and improperly shifted the burden onto homeowners to prove they were not subject to the surcharge.
One plaintiff, Simon Hedley, ultimately received an exemption after providing tax information. Mastro argued his experience demonstrated how easily the city could have made the required determinations itself.
“Was it negligence, was it laziness?” Mastro asked in court.
The city defended its rollout, arguing that freezing the process would itself hurt taxpayers seeking exemptions and disrupt deadlines. Attorney Steven Banks argued that keeping the supplemental roll in place would preserve the status quo and give taxpayers time to navigate the process.
The hearing grew heated at times as lawyers sparred over the administration’s handling of the tax.
When Mastro attempted to interrupt Banks during the city’s argument, Banks shot back, “Say nothing while I’m speaking.”
The two also clashed over Mastro’s characterization of the notices as “terrorizing” homeowners. Banks called the language offensive in reference to Mamdani being the city’s first Muslim mayor.
“That’s not terrorism,” Banks said of the rollout. “It happens to be acting in accordance with law.”
Mastro later clarified that he was describing how homeowners perceived the notices, arguing that residents viewed them as threatening because they indicated a homeowner was subject to the surcharge.
Mastro repeatedly hammered the administration’s execution of the tax, calling the situation “extraordinary,” the notices “bizarre” and the publication of the property roll “ludicrous.” He argued that “thousands of New Yorkers are on edge” and urged the court to remove what he called the “threat of jeopardy.”
“A TRO radically upsets the status quo,” Banks told the court.
PROGRESSIVES WANT TO TAX BILLIONAIRES FIRST, AND YOU’RE NEXT ON THE LIST
In granting the TRO, Ozzi found that the notices caused irreparable harm and that the city, not property owners, was required to make the initial determination. He also found the plaintiffs were likely to succeed on the merits because of missteps by the city, while stressing that the underlying case has not yet been decided.
The judge said he could not “unring the bell” on notices already sent, but could prevent additional mistakes, and said the city had not done its due diligence.
Mamdani’s administration quickly vowed to fight back.
“We disagree with today’s ruling, but we are confident in both the pied-à-terre surcharge and the City’s ability to implement it fairly and effectively,” Matt Rauschenbach, a spokesperson for the mayor, said.
“This surcharge asks those who own second homes valued at $5 million or more to contribute their fair share to the city they benefit from,” he added.
JON STEWART PRESSES MAMDANI ON WHERE HE BREAKS WITH FELLOW DEMOCRATIC SOCIALISTS ON PRISONS AND BORDERS
Rauschenbach said the Law Department would “appeal the ruling immediately,” which the administration says will stay the order, and that the city intends to continue implementing the surcharge.
Mamdani himself had struck a defiant tone before the ruling, taking a shot at Mastro over his repeated legal challenges to City Hall.
“There are few things more certain in New York City than death, taxes and Randy Mastro filing a lawsuit against this administration,” Mamdani said.
The mayor said he remained confident both in the legality of the city’s actions and in the surcharge itself, arguing that revenue from second homes worth more than $5 million would help pay for “safer streets,” “stronger schools” and other city services.
When asked directly whether he regretted the rollout, Mamdani defended the administration’s handling of it, while acknowledging that “with any new tax, there are more questions than there are answers.”
Mamdani said only about 17,000 homeowners in a city of 8.5 million are potentially affected and pointed to the city’s extension of an exemption deadline.
The legal fight is now moving quickly.
Ozzi ordered the defense to submit its order to show cause by Aug. 24, with plaintiffs’ replies due Aug. 27. Oral arguments on the merits are scheduled for Aug. 31.
Read the full article here