Three New York City homeowners have filed a lawsuit in Staten Island Supreme Court challenging the implementation of a new state-authorized surcharge on certain non-primary residences, commonly known as the pied-à-terre tax.
The petitioners — Rachel O’Brien, Carmine Morano, and Simon Hedley — named the City of New York, Mayor Zohran Mamdani in his official capacity, the New York City Department of Finance, and Finance Commissioner Richard Lee as respondents. The action, which was brought as an Article 78 proceeding and declaratory judgment claim, does not contest the underlying statute itself.
The surcharge, which was enacted by the state Legislature and signed by Governor Kathy Hochul as part of a budget package earlier this year, took effect for the fiscal year beginning July 1, 2026. It applies to one- to three-family homes with a market value of at least $5 million and to cooperative and condominium units valued at $1 million or more that do not serve as a primary residence.
According to the petition, the Department of Finance published a supplemental market value roll on July 24 that lists more than 900,000 residential properties, including owners’ names, addresses, and assessed values, described as related to the surcharge. Concurrently, the department mailed notices to approximately 17,000 property owners stating that their properties “may be subject” to the surcharge and directing them to apply for an exemption. The original response deadline of August 21 was later extended to September 18, according to a report from the New York Post.
POLL: Should Sanctuary Cities Be Banned From Federal Funding?
NYC homeowners sue over Mamdani admin's alleged bungled pied-à-terre tax rollout https://t.co/olOT1awkUf pic.twitter.com/iZdO6UBtNx
— New York Post (@nypost) August 7, 2026
The filing asserts that the Department of Finance “has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge.” It further claims the city failed to fulfill a statutory obligation to make an initial determination, using available information, of which properties actually qualify before publishing the roll or issuing notices.
The petitioners further argue that the published list “should never have been posted in the first place” and “has caused mass confusion as a result, and should therefore be immediately removed from DOF’s website.”
Former Department of Finance Commissioner Martha Stark submitted an expert affirmation with the suit. Stark estimated that only about 24,218 of the roughly 959,710 records on the roll meet the statutory value thresholds. She described the 17,000 notices as “strikingly over-inclusive” and estimated the actual number of properties likely subject to the surcharge at between 5,000 and 6,000.
“It is absolutely absurd that the City publicly identified our home as a possible second residence when my husband and I live here, raise our family here, and have made it our permanent home. The City had records available that could have confirmed that before publishing our name and address,” O’Brien, whose Staten Island home appeared on the roll, said in a statement. “Families should not be forced to correct the government’s mistakes because the administration rushed a politically convenient rollout.”
A spokesperson for Mayor Mamdani, Matt Rauschenbach, responded that the Law Department “is prepared to vigorously defend the city against this suit.” He said the Department of Finance “has been working around the clock” to provide information and that “whenever government asks something new of New Yorkers, we have a responsibility to make the process clear, transparent and accessible.”
Rauschenbach added that the surcharge “will help deliver the city New Yorkers deserve: cleaner parks, safer streets and critical public investments that make our city a more affordable place.”
RELATED: Mamdani Gets Torched After Resurfaced Clip Reveals Fake ‘Ugandan’ Accent
