What to Know About Mamdani’s Second-Home Tax That Trump Says ‘Must Be Stopped’
Zohran Mamdani’s cornerstone tax on New York City’s high-value second homes is facing backlash—including from President Donald Trump, who wants to thwart what he deems the mayor’s “dangerous political ‘experiment.’”
“The NYC Pied-a-Terre Tax is costing New York City and State a fortune in that the money, eventually to be gotten, is very little compared to to [sic] the TAXES PAID by the tens of thousands of people who are fleeing the City, never to return,” Trump posted on Truth Social on Tuesday morning.
Trump argued that the tax, which took effect last month, could encourage wealthy property owners and taxpayers to leave for places like Florida where taxes are lower. The tax may affect him too: Trump is a born-and-raised New Yorker whose legal primary residence is in Mar-a-Lago, Fla., but he also owns a second home in Trump Tower in Manhattan, which city authorities have assigned a market value of about $6 million (though it could sell for tens of millions more based on valuation estimates).
“This dangerous political ‘experiment’ in New York will destroy what was once a great City and State,” Trump said, adding: “This doesn’t work in America, and must be stopped, NOW!” The President said he was looking to see if the federal government has “any legal right to avert this disaster.”
It’s unclear what legal means Trump could use to dislodge the tax, which New York Gov. Kathy Hochul announced in April to support Mayor Mamdani amid a city budget squeeze. In response to Trump’s criticisms, Hochul, also a Democrat, defended the tax as about “paying your fair share.”
“I believe that in the state of New York, if you have a $5 million second home, then you should be able to afford to pay for police and fire and trash removal and snow removal in the wintertime,” Hochul told local media Tuesday. “Donald Trump ought to focus on all the pain he’s causing New Yorkers and knock it off and don’t worry about us.”
What is New York’s pied-à-terre tax?
In line with Mamdani’s promise to “tax the rich,” New York City implemented a pied-à-terre tax, a yearly levy on high-value residential properties that are not one’s primary residence. Hochul signed the legislation containing it on May 28, and it became effective beginning July 1.
New York authorities say the tax is expected to generate at least $500 million a year in revenue, which would help close the city’s $12 billion budget gap over fiscal years 2026 and 2027.
For two fiscal years starting in July 2026, the levy may apply to one-, two-, and three-family homes valued by the city’s finance department at $5 million or greater, as well as condominium and cooperative units valued at $1 million or more. For covered family homes, the levy rate starts at 0.8% of the market value and goes up to 1.3% for properties exceeding $25 million. As for covered condos and co-ops, the surcharge starts at 4% and reaches up to 6.5% for properties valued at $5 million or more.
As part of the rollout, New York City’s finance department sent letters to about 17,000 addresses that “may be subject to the charge” and shared a data set of about 900,000 properties on its website. A listed property may be exempt from the tax if it is the primary residence of a tenant or subtenant, or an immediate family member of the owner or a majority stakeholder, among others. If a property owner received a letter, they can file for exemption if they are eligible.
What’s the backlash about?
Critics have pushed back against Mamdani’s Administration’s apparent attempt to single out the rich. In April, Mamdani posted a video on social media outside a building where hedge fund billionaire Kenneth Griffin purchased a penthouse for $238 million in 2019. Griffin, a Miami resident, suggested the video put him in harm’s way.
Last week, a group of homeowners sued the city administration over its rollout of the tax. The lawsuit particularly challenged the release of the data set and the sending of the letters, and argued that the city “has arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject to the Surcharge.”
The suit said that some residents who are actual primary residents at the addresses still received letters, and criticized how those seeking an exemption only had until Aug. 21 to submit their applications. (That deadline has since been extended to Sept. 18.)
Randy Mastro, the former first deputy mayor under Mamdani’s predecessor Eric Adams and a vocal critic of the incumbent mayor, represented the plaintiffs. Speaking to Spectrum News NY1, Mastro said he also received one of the letters erroneously, and described the tax program as “a botched rollout that didn't involve any of the work the Mamdani Administration should've done before sending out any of those letters.”
On Monday, Staten Island judge Wayne M. Ozzi issued a temporary restraining order on the rollout. “Sending out notices to 17,000 homeowners who might be subject to a surcharge doesn’t satisfy the intent of the legislation,” Ozzi said in the Monday hearing, as reported by the New York Times.
But the city appealed the judge’s order, triggering an automatic stay pending appeal. A hearing before Ozzi is scheduled for Aug. 31.
On Monday, Mamdani continued defending the tax and said his administration was “confident” in it, as it would give the city more funding for its schools and streets. As for the rollout, the mayor said: “We always know that with any new tax, there are more questions than there are answers.”
Reporting from Time contributed to this story.
