New York appeals court lets city roll out pied-à-terre surcharge

The Appellate Division of the New York Supreme Court ruled on Wednesday that New York City could roll out its pied-à-terre surcharge, reversing a September decision by a Staten Island judge who had sided with homeowners who sued over the tax. The city had invoked a stay the same night and appealed.

The appellate court found the homeowners lacked standing and could not prove injury. It said their stated confusion was "too generalized, tenuous, and ephemeral" to establish actual injury, and that concerns about future harm rested on "speculation about what might occur." On the homeowners' claim that proving a home is a primary residence would cost time and money, the court said tax paperwork normally takes time and no documentation substantiated the costs.

The surcharge applies to second homes worth more than $5 million. Mayor Zohran Mamdani said in a statement that the court prevented the attempt of the "ultrawealthy to avoid paying their fair share," and that the revenue would contribute to "safer streets, cleaner parks and essential public services."

Randy Mastro, a lawyer for the homeowner plaintiffs, said in a statement it was "a shame" the court reverted the September decision. "What the City has done here is unconscionable - trying to ensnare thousands of people who don't owe this surcharge into having to prove they live in their own homes or else have to pay it," he said. "Now, this lawless and chaotic data collection scheme will go unremedied."

The tax faces another challenge: Florida residents Steve Wynn and Wilbur Ross sued New York state in September over its constitutionality, with arguments set for December. Mastro said the "ultimate day of reckoning" for the surcharge would come next month, when its constitutionality is decided, and that the plaintiffs remain confident they will prevail.