A New York appeals court on Wednesday threw out a lawsuit over the rollout of Mayor Zohran Mamdani’s pied-à-terre tax, ruling that the homeowners who sued had not adequately shown they were harmed. The Appellate Division, Second Department, reversed a Sept. 29 judgment by Staten Island Supreme Court Justice Wayne Ozzi that had granted the homeowners injunctive and declaratory relief. The four-judge panel was unanimous. It denied the petition and dismissed the case a week after hearing arguments. Seven homeowners, represented by former First Deputy Mayor Randy Mastro, sued the city in August. They challenged the Department of Finance’s publication of a supplemental roll of about 900,000 properties and the roughly 17,000 notices it mailed to owners who might owe the surcharge, arguing the city made owners prove they live in their homes instead of checking its own records first. The court did not rule on that argument. It found the homeowners lacked standing, or the legal right to sue, because they showed no concrete injury. Appearing on the roll or receiving a notice wasn’t enough, the judges wrote. The notice, court documents read, “serves an informational purpose,” like a debt collection letter, and the state legislature “must have anticipated that the list of notice recipients would not be exact or flawless,” or it would not have created an exemption process. The court also said the rollout confusion was too “generalized, tenuous, and ephemeral” to count as an injury. It said the homeowners offered no evidence that anyone had misused the information or that they faced stalking or fraud, and it noted that the city’s annual assessment rolls already list each owner’s name, assessed value and market value. The court also said that the cost of applying for an exemption was not enough cause for injury, as all taxpayers spend time and money complying with tax rules, and the homeowners had not documented or quantified their costs. Two of the seven petitioners, Rachel O’Brien and Carmine Morano, never alleged they received a notice. The other five were exempted after the suit was filed. The panel sided with the homeowners on two points: It rejected the city’s argument that exempting the petitioners made the case moot, and its argument that the tax law limits challenges to appeals before the city’s Tax Commission. It also declined to decide whether DOF broke its own rule by not relying on 2024 income-tax data when it chose who got notices. Other legal challenges The ruling does not settle the tax’s other legal fights. Gothamist reported the surcharge faces three separate challenges. The city has also changed course since the notices went out. After the state sent early 2025 income-tax data on Aug. 12, DOF cleared 1,210 owners and said it would send new letters to about 10,800 others. Gothamist reported that DOF has now granted more than 8,800 exemption requests. Comptroller Mark Levine estimated earlier this year the tax could raise up to $380 million from about 11,200 properties. Mamdani has said it will raise $500 million a year. In a statement, Mamdani said the court “rejected an attempt by the ultrawealthy to avoid paying their fair share.” He added: “But owning a second home worth over $5 million should come with a responsibility to the city that makes it valuable.” He said the city will keep defending the law against “ongoing challenges in Suffolk County,” brought by “some of the same uberwealthy interests whose arguments just lost in court today.” He closed: “We will implement the pied-a-terre surcharge fairly and efficiently, ensuring that those most able to contribute do their part to build a city that works for everyone.” This story was originally featured on Fortune.com ...read more read less