Trump floats federal legal challenge to New York's pied-à-terre tax after judge temporarily blocks rollout

Trump weighs federal intervention

President Donald Trump said on August 11 he was assessing whether the federal government could legally challenge New York City's new pied-à-terre tax, a surcharge on luxury second homes championed by Mayor Zohran Mamdani. In a post on Truth Social, Trump called the tax a "dangerous political 'experiment'" that would "destroy what was once a great City and State."

“I am looking to see if the Federal Government has any legal right to avert this disaster, before it is too late, for the millions of people who cherish New York and want to see it thrive, as opposed to becoming a filthy, crime ridden, decrepit place of mockery and scorn.”

Trump's Trump Tower penthouse has an assigned Department of Finance market value of about $6 million, placing it within the tax's scope. Trump changed his primary residence from Trump Tower to Palm Beach, Florida, in 2019. The White House did not respond to a request for comment on the post.

Court halts rollout

A Staten Island judge, Wayne Ozzi, issued a temporary restraining order on August 10 halting the tax's rollout, siding with three homeowners who sued over the implementation process. The city appealed the order on the morning of August 11, which essentially prevented it from being enforced. The next hearing is scheduled for August 31.

The lawsuit does not challenge the underlying tax law. Instead, it accuses the mayor's office of failing to follow state notice requirements and of causing "panic" in late July by releasing a list of nearly 1 million properties that might be subject to the surcharge, then mailing about 17,000 notices to a smaller group of property owners. Some homeowners say they received notices despite being full-time city residents.

Plaintiffs with political ties

The lawsuit has connections to Mamdani's political rivals. One plaintiff is Rachel O'Brien, who is married to Republican City Councilmember Frank Morano; her father is another plaintiff. The homeowners' lawyer, Randy Mastro, served as first deputy mayor under former Mayor Eric Adams and as chief of staff to Rudy Giuliani. Mastro argued in a letter to the court that the judge's order remained in effect and that the city had no right to disregard it.

Mamdani stated on August 10 that the city would vigorously defend its stance in court. Gov. Kathy Hochul, who introduced the tax legislation in Albany, acknowledged frustrations with the city's rollout on the same day.

How the tax works

The surcharge applies to condos and co-ops used as second homes with a city-assigned "market value" of at least $1 million, and to one-, two-, and three-family homes with a market value exceeding $5 million. The rate is progressive, starting at 4% of the property's value. The city finalized implementation rules in mid-July and was required by state law to notify property owners by August 30.

Condos & co-ops (min. market value)1,000,000

1-3 family homes (min. market value)5,000,000

Trump Tower penthouse (assigned value)6,000,000

Condos & co-ops (min. market value)

1000000 $

1-3 family homes (min. market value)

5000000 $

Trump Tower penthouse (assigned value)

6000000 $

Data from the article text

The tax is expected to raise $500 million annually for New York City, which faces a budget gap exceeding $5 billion. Mamdani, who had sought broader tax hikes on corporations and wealthy New Yorkers, celebrated the surcharge as fulfilling his campaign pledge to "tax the rich." In early July, he posted a social media video filmed outside a building where billionaire financier Kenneth C. Griffin purchased a penthouse for $238 million in 2019.

Broader political context

Trump and Mamdani have met twice in person, with their initial encounter proving surprisingly cordial despite policy differences on immigration and support for Israel's war in Gaza. In his August 11 post, Trump escalated rhetoric, employing phrases like "Radical Left Jihadists" when referring to the administration of New York's first Muslim mayor. Trump previously tried to terminate federal approval of Manhattan's congestion pricing program after it took effect in January 2025, but a federal judge blocked that attempt.