A lawyer for New York City urged a Staten Island judge to throw out a homeowners’ lawsuit challenging the Mamdani administration’s pied-à-terre tax on Monday, calling it “a policy dispute dressed up as a case” seeking justice for “nobody.”
City Law Department attorney Steve Banks, squaring off in lively oral arguments with homeowners’ lawyer Randy Mastro, asked Staten Island Supreme Court Judge Wayne Ozzi to dismiss the effort to force Mamdani’s office into a do-over of its implementation of a tax on pricey second homes for non-New York City residents.
“Petitioners rushed to court based on a non-final agency determination that, it turns out, caused no injury at all,” Banks said.
“This is a case about nobody with a live claim,” the city’s lawyer later added. “The case before your honor is not an actual case in controversy — it’s a policy dispute dressed up as a case in controversy.”
Individual properties that do not serve as a primary residence and have a market value above $5 million, as well as co-ops and condos with a market value over $1 million, are subject to the surcharge introduced under Mamdani as a means to balance the budget by taxing New York’s wealthiest. Gov. Hochul passed the pied-à-terre as part of the state budget in May.
The city sent letters to around 17,000 people in July, alerting them that they may be subject to the tax and could file for an exemption, sparking controversy as many claimed they were full-time city residents. After that initial determination, the city Department of Finance obtained 2025 tax data from the state earlier than it’s typically available and revised its determinations based on information updated from homeowners’ 2024 tax returns.
Last week, the city DOF sent out 1,251 letters notifying people they were not, after all, subject to the charge.
The Aug. 7 suit filed by Mastro, who served in Rudy Giuliani and Eric Adams’ administrations, accused City Hall of having “arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject” to the tax on secondary properties.
The homeowners it represents have since been informed they are exempt from the tax. Mastro on Monday said they weren’t fighting the statute, but the manner in which the pied-à-terre tax process has been carried out, urging the judge to compel the city to start again after a “major screw up.”
Banks, who at one point asked the judge to admonish Mastro for jumping to his feet in protest whenever he disagreed with his adversary, argued that siding with the homeowners in the suit would prevent thousands of people who are subject to the charge from moving forward with their appeals to the city’s tax commissioner.
He said the rules were clear that the taxing process is iterative, and that no laws had been broken.
Mastro countered that the city rushed out “threatening” notices and should have taken time to individually assess thousands of properties rather than “shift the burden of proof” to homeowners. He renewed previous arguments about the city publishing an online public database with information on 900,000 property owners that could be related to the surcharge, which actually included a second home owned by Justice Ozzi.
Although no one was forced to write a check, Mastro described the initial letters sent out as an abuse of New Yorkers by their government. He said many owners of luxury secondary residences in the city — like himself — had been harmed by having to consult lawyers and accountants when they received the first letter and by having their personal tax returns shared with the city.
“That they have done this in such a ham-handed manner, it is so offensive,” Mastro said. “This is outrageous.”
Among several swipes Mastro took at the mayor’s office, the lawyer said the democratic socialist administration “has, let’s be honest, antipathy toward private property ownership.”
Ozzi reserved ruling on the matter, telling the parties he would issue a decision “in due course.”
The judge had issued an order temporarily blocking the city’s rollout of the tax earlier this month. The city appealed, and a state appeals court judge ruled that it could move forward with implementing the tax pending the outcome of the lawsuit.