An appeals court in New York on Wednesday overturned an earlier ruling that had blocked implementation of a tax on luxury real estate proposed by Gov. Kathy Hochul and backed by Mayor Zohran Mamdani. The levy, known as the pied-à-terre tax, is to apply to properties worth more than $5 million that are not the owner’s primary residence. City officials estimate it could bring in about $500 million a year.
The appeals court, based in Brooklyn, reversed a September decision by the state Supreme Court. The trial judge had found that the city implemented the new tax rules improperly. The judge ordered officials to remove the existing list of property owners exempt from the tax and replace it with a list of those subject to the new levy.
The appeals court, however, found that the plaintiffs did not have sufficient legal standing to challenge how the tax was implemented. The plaintiffs were former New York property owners, and the outcome of the case did not directly affect their legal situation. As a result, the earlier ruling was overturned, allowing city authorities to continue applying the rules they adopted. Notably, the decision concerned the plaintiffs’ right to bring the suit, not a substantive review of all of the tax provisions.
The pied-à-terre tax was proposed earlier this year by New York Gov. Kathy Hochul and later won the support of Mayor Mamdani. According to city officials, the additional revenue is meant to help fund public services, including park maintenance and improved safety.
“Owning a second home worth more than $5 million should come with a responsibility to the city that makes it valuable,” Mamdani said.
The mayor welcomed the court’s decision, calling it a victory for the city in the dispute over the wealthiest property owners’ contribution to funding local services.
“Today, an appeals court rejected the ultra-rich’s attempt to avoid paying their fair share,” he said. He added that the surcharge is meant to help pay for safer streets, cleaner parks and basic services for residents.
The property owners who challenged the rules, and their attorneys, have not yet commented on the ruling.
Editor: JŁ
Source: Nowy Dziennik
