Zohran Mamdani’s marquee plan as part of his ‘tax the rich’ agenda stalled again in a courtroom Tuesday after a judge accused the city of mishandling its rollout of the so-called ‘pied-a-terre’ tax. 

The levy would impose an annual surcharge on wealthy property owners who do not primarily live in New York City with second homes worth more than $5 million.

State Supreme Court Judge Wayne Ozzi of Staten Island ruled in favor of homeowners who sued the city, arguing it didn’t work hard enough to figure out just who should be facing the tax before starting to collect.  

‘Homeowners are being substantially harmed and penalized needlessly by D.O.F.’s method of implementing the tax law,’ Ozzi wrote. 

Ozzi hit out at the city publishing a list of almost a million properties that could face the tax, including the names of the approximately 17,000 owners. 

The tax – which was signed into law by Democrat Governor Kathy Hochul – remains legal but is now in flux, as it is no longer apparent how the city will collect the money owed, which must be received by next spring.

The judge said the city must now remove its list and replace it with a more limited one that only displays the properties facing it. 

‘Our administration is fighting every day to deliver for working New Yorkers,’ Mamdani spokesperson Matthew Rauschenbach told The Daily Mail. 

Zohran Mamdani’s headline plan as part of his ‘tax the rich’ agenda stalled again in a courtroom Tuesday after a judge accused the city of mishandling its rollout of the so called ‘pied-a-terre’ tax

The tax applies to three-family homes worth at least $5 million and condos and co-ops valued at $1 million or more that are not primary residences

‘The ultrawealthy are fighting in court to avoid paying their fair share. They have filed lawsuit after lawsuit to protect their privilege, and we will not back down.’

Rauschenbach added that the city will ‘continue implementing the surcharge fairly, efficiently and in full compliance with the law.’

The city appealed Ozzi’s ruling Tuesday night and has invoked an auto stay allowing the city to continue the implementation of the tax.  

‘City Hall botched this rollout and should have just admitted the errors and fixed its own mistake, instead of wasting time and taxpayer dollars by fighting it in court,’ said Randy Mastro, a lawyer representing the homeowners in court.  

Residents suing the city contend that Mamdani’s tax rollout ’caused mass confusion’ because city officials ignored state-provided data about who would be eligible for the tax under the new law.

They argue city officials put the onus on longtime New Yorkers, many of whom were left scrambling to prove they lived at their residences ahead of a quick one-month deadline.

Yet the lawsuit does not address legal concerns with the tax itself, which applies to three-family homes worth at least $5 million and condos and co-ops valued at $1 million or more that are not primary residences.

The tax progressively increases as the value of the home increases, topping out at 1.3 percent of a single family’s home value when it’s worth over $25 million and 6.5 percent of a condo or co-op’s value when it’s worth over $5 million. 

It is projected to raise roughly $500 million for the city annually.

A view of the interiors at 220 Central Park South, residence of billionaire hedge fund investor Ken Griffin, who previously sparred with Mamdani over a video message in front of his Manhattan penthouse

Critics of Mamdani’s proposal argue New York relies heavily on high earners and commercial real estate taxes to fund city services – and fear alienating billionaires and large employers could backfire economically.

Still, Mamdani appears determined to keep pushing his tax agenda despite the public fallout.

However, last month it was revealed the mayor is extending an olive branch to the community by establishing the Business Advisory Council, including CEOs of Chobani, Etsy and the WNBA New York Liberty team. 

Hamdi Ulukaya, the billionaire CEO of Chobani, had urged Mamdani in April to ‘have a regular dialogue with the business community,’ Kathryn Wylde, the former CEO of the Partnership for New York City, who was also at the meeting, told the Wall Street Journal. 

‘It’s an honest effort by the mayor to get direct input from a group of business people that are not part of his natural constituency,’ Wylde added. 

‘He isn’t used to messaging to this constituency, and doesn’t necessarily anticipate how they’re going to react to various policies or statements.’

There are 15 business leaders who have agreed to be a part of the council and will meet quarterly with Mamdani and Deputy Mayor for Economic Justice Julie Su, the mayor’s office said in an announcement. 

The advisory is intended to advise City Hall on finance, technology, real estate, sports, entertainment, retail and healthcare.

Prominent council members include: CEO of the New York Liberty Keia Clarke, CEO of Etsy Kruti Patel Goyal, CEO of Brandon Blackwood New York Brandon Blackwood, President and CEO of Northwell Health John D’Angelo, President and CEO of Amalgamated Bank Priscilla Sims Brown and acclaimed restaurateur Marcus Samuelsson. 

The council represents business leaders across multiple sectors, including healthcare, fashion, sports, food and finance. 

However, tech and Wall Street leaders are noticeably absent. The New York Times reported before the official announcement that Jose Tavarez, the president for New York City at Bank of America, Ken Chenault, the former chief executive of American Express, and Charles Phillips, a private equity executive, were approached to join the council but ultimately did not. 

A spokesperson for the mayor’s office told the Times that they could not discuss specific conversations with candidates, but that some executives choose not to participate due to time commitments, media attention, or clearance from their companies.