Judge Blocks Mayor Mamdani's Tax on Luxury Second Homes in New York

A New York judge has temporarily halted Mayor Zohran Mamdani's controversial tax on luxury second homes, dealing a setback to the city administration's efforts to close a significant budget deficit. The tax, which targets properties valued at $5 million or more, and co-ops and condos worth $1 million or more owned by non-residents, was approved by the state legislature in May and took effect on July 1.

The legal challenge was brought by three homeowners who argue the "pied-à-terre" tax, projected to generate $500 million annually, incorrectly classifies their primary residences as secondary homes. The judge's order prevents the city from issuing further tax notifications while the lawsuit proceeds. A key hearing is scheduled for August 31.

Mayor Mamdani had sought increased state funding to address a $5.4 billion deficit he inherited. While the state governor, Kathy Hochul, did not approve his broader tax proposals targeting the wealthy, she supported the creation of this "pied-à-terre" tax. The city's administration has announced its intention to appeal the judge's ruling.