- New York City resumes its luxury-home tax following an appeals court stay on a previous halt.
- The Mamdani administration expects to raise five hundred million dollars annually through the new property surcharge.
- Homeowners have until September eighteen, twenty twenty-six to seek exemptions despite ongoing legal challenges.
New York City can resume its luxury-home tax rollout after an appeals court stayed a lower-court order that had halted the program. Associate Justice Philip Hom signed the order Thursday for the Appellate Division, Second Department, allowing the city to proceed while homeowners challenge the levy.
The appellate stay remains in effect until a hearing on Aug. 31, 2026, in Staten Island Supreme Court. The hearing is scheduled for 2:15 p.m.
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Judge Wayne M. Ozzi had paused the rollout Monday after homeowners argued that the city wrongly identified primary residences and confused owners about who must pay. The city had sent notices to 17,000 homeowners.
The administration of Mayor Zohran Mamdani projects that the program will raise $500 million annually. Recipients of the notices have until Sept. 18, 2026, to seek an exemption, after the city moved the deadline from August.
President Donald Trump criticized the levy on Aug. 11, calling it a “dangerous political 'experiment.'” He also wrote, “This must be stopped, NOW!”
Randy Mastro, the attorney for the homeowners, said the city had “botched the rollout.”
The appellate order puts the city’s property roll back in play
Ozzi’s temporary restraining order had done more than pause enforcement. It directed the city to take the supplemental property roll out of public access and barred officials from acting on the notices already sent.
Hom’s order suspended those restrictions. City officials may therefore continue the rollout while the case returns to Ozzi’s courtroom.
Rachel O’Brien, Carmine Morano and Simon Hedley filed the lawsuit behind the temporary pause. They say the city treated some primary homes as second residences.
The homeowners also objected to the publication of personal property information in a searchable database. They described the disclosure as “doxxing.”
Their case challenges the rollout’s administration, not only the size of the tax bills. The next hearing will test whether the city can continue using the disputed process.
The levy reaches expensive houses, condos and co-ops
The surcharge applies to one-, two- and three-family homes valued by the city at $5 million or more. It also covers condominiums and cooperative units valued at $1 million or more when the property is not the owner’s primary residence.
Rates rise by property value. The highest rate is a 6.5% surcharge for the most expensive condominium and cooperative units.
| Property category | Value threshold | Highest rate identified |
|---|---|---|
| One- to three-family homes | $5 million or more | Not specified |
| Condominiums and cooperative units | $1 million or more | 6.5% |
The tax took effect on July 1, 2026. Governor Kathy Hochul signed it into the 2026–2027 New York State budget on May 28, 2026.
The measure was designed in part to help close a $12 billion city budget gap. Mamdani has defended the policy as a way to fund “safer streets” and “stronger schools.”
He has dismissed warnings that wealthy residents could leave New York City as “imagined.”
The city’s broad property list led to a smaller group of direct notices
The city published a tax roll identifying approximately 960,000 properties that could potentially fall within the program. It separately mailed formal notices to roughly 17,000 homeowners.
Thousands of permanent New York City residents reportedly received notices saying their primary residences could face the surcharge. Those owners must provide proof of residency to avoid bills tied to a property that may qualify for an exception.
The published roll contained names, addresses and property values. Its release generated privacy and security concerns among homeowners whose information appeared in the searchable database.
Matt Rauschenbach, a spokesperson for the mayor, said the city would “continue with the pied-à-terre's implementation.” He said the administration was “confident in [its] position” and the legality of the surcharge.
That position now faces a court review. The appellate order allows the city’s process to operate before the lower court considers the homeowners’ claims.
Owners must act by September while the court fight continues
Recipients of the city’s notices have until Sept. 18, 2026, to file for an exception. The deadline applies while the city’s classification process remains under challenge.
Owners whose properties qualify face a new annual expense. Real estate experts have warned that the charge could reduce investment in the luxury market.
Mastro criticized the city’s decision to continue the rollout after the appellate ruling.
“It is a shame that the City can't own up to its own mistakes and admit that it has badly botched the rollout”
The appellate stay does not resolve the lawsuit. Ozzi’s courtroom will take up the dispute on Aug. 31, 2026, after the city’s tax process has resumed.
