New York City's pied-a-terre tax can continue its planned rollout while it faces a legal challenge, CNBC reported Thursday, citing an appellate judge's ruling.

The ruling follows a temporary restraining order issued Monday by Staten Island Judge Wayne Ozzi that briefly halted the levy on second homes above a certain value, the report said.

New York City sought confirmation from the appeals court that an automatic stay triggered by its appeal would allow implementation to continue.

The lawsuit was filed by three city residents challenging the legality of the rollout, rather than the tax policy itself, CNBC said.

The suit concerns the city's distribution of information on thousands of homeowners and notices sent to 17,000 people who may be subject to the tax.