A New York State Supreme Court judge on Staten Island temporarily blocked New York City’s plan to impose a new tax on the second homes of affluent residents, delivering a legal setback to Mayor Zohran Mamdani’s administration. Judge Wayne M. Ozzi granted a temporary restraining order on Monday in response to a lawsuit filed by a group of homeowners who argued that the city’s implementation of the tax was flawed.

The tax, which was proposed by Governor Kathy Hochul and supported by Mayor Mamdani, targets residential properties used as second homes with values exceeding certain thresholds—condominiums and co-ops valued at $1 million or more, and one- to three-family homes valued above $5 million. The surcharge is expected to generate approximately $500 million annually to help close the city’s budget gap.

While Justice Ozzi’s ruling did not address the constitutionality or legality of the tax itself, it paused its rollout due to concerns raised about the city’s administration of the program. The judge cited the issuance of notices to some 17,000 property owners who might be subject to the tax, stating that the city’s approach caused “irreparable harm” and did not align with the legislative intent.

The lawsuit contended that the city improperly published a comprehensive data set containing nearly one million properties, including addresses and owner names, causing undue public exposure and confusion. The plaintiffs argued the city should have first refined this data to identify potential taxpayers more precisely before alerting homeowners. Some recipients of the initial notifications reportedly received letters in error, intensifying claims of mismanagement.

Following the judge’s order, the city filed an appeal late Monday, effectively preventing the restraining order from taking immediate effect while the matter is reviewed by a higher court. Matthew Rauschenbach, a city spokesperson, expressed confidence in the tax’s fairness and the city’s ability to implement it properly. Legal experts noted that given the significant revenues at stake, appellate courts are likely to expedite consideration of the case.

The tax has become a prominent issue in New York City politics, aligning with Mayor Mamdani’s emphasis on addressing economic inequality. The mayor has highlighted the measure as delivering on his promise to “tax the rich,” citing examples such as billionaire Kenneth C. Griffin’s $238 million penthouse purchase in 2019. Supporters view the tax as a necessary step toward greater fiscal equity, while critics argue it risks driving high-income residents out of the city by increasing their tax burden.

Governor Hochul’s office characterized the legal dispute over the tax’s administration as an issue for the city and courts to resolve. The governor affirmed her stance that owners of multimillion-dollar second homes should contribute their fair share.

The lawsuit remains active, with further court proceedings scheduled for August 31. Meanwhile, homeowners who believe they are exempt from the surcharge have been instructed to submit exemption applications by mid-September. The city reported receiving over 3,800 such applications to date.