RESOLVING THE LEDGER
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See the full story · 3 sourcesPresident Donald Trump on Tuesday decried New York City 's pied-à-terre tax and said he is exploring whether the federal government "has any legal right to avert this disaster, before it is too late."
The tax on nonprimary residences of wealthy owners "doesn't work in America, and must be stopped, NOW!" Trump wrote in a Truth Social post .
Trump's vow to seek federal intervention against the tax, which was pushed by Mayor Zohran Mamdani and passed by the New York State legislature in late May, came one day after a Staten Island judge temporarily blocked the new policy.
New York City government quickly filed a motion to seek an appeal of that order, placing the judge's order on hold.
Mamdani's office did not respond to CNBC's request for comment on Trump's threat to challenge the pied-à-terre tax. Asked about the ongoing lawsuit, the mayor's office referred CNBC to Mamdani's assurance at a Monday press conference that "we look forward to vigorously defend our city's position in court."
"We are confident in our position," Mamdani said. "And that is a confidence coming from both the legality of the City's actions as well as the importance of a surcharge on secondary homes worth more than $5 million, a surcharge that will help fund safer streets, that will help fund stronger schools, and it will help fund the city that New Yorkers deserve."
Trump, in his Tuesday morning post, called the tax a "dangerous political 'experiment' in New York will destroy what was once a great City and State."
Trump added that it's hard for him as president "to sit back and watch it happen, especially to a place I once loved."
Trump is a native New Yorker who lived in a penthouse in Manhattan's Trump Tower, but moved his primary residence to his Mar-a-Lago golf club in Florida in 2019. It is unclear whether Trump or his immediate family would be subject to the NYC tax.
Trump also asserted that the levy on second homes is spurring thousands of people to flee to more tax-friendly regions, canceling out any revenue that the policy might bring in.
The claim echoes other warnings that have followed the election of Mamdani, a democratic socialist who has vowed to make the city's richest pay more.
Citadel CEO Ken Griffin , for instance, threatened to move his business to Miami after Mamdani unveiled the pied-à-terre tax in a video that featured Griffin's ultraluxury Manhattan penthouse .
Griffin also suggested Citadel was reconsidering moving ahead with a pricey redevelopment of a Park Avenue building. Vornado CEO Steven Roth, however, said in a recent earnings call that Griffin was not abandoning his plans for the NYC building.
Some have shrugged off concerns that hiking taxes on the wealthy in New York, which already has among the nation's highest income tax rates, will push people out of the state. While some studies show New York's share of millionaires has declined in recent years, others dispute the idea that the rich flee high state taxes.
The pied-à-terre tax backed by Mamdani and New York Gov. Kathy Hochul would raise taxes on second properties valued at $1 million or more, with more valuable residences facing higher rates.
Mamdani, who announced the policy on Tax Day, said it is expected to raise $500 million in revenue, though NYC Comptroller Mark Levine said weeks later that that estimate could fall to between $340 million and $380 million.
Last week, three NYC residents filed a lawsuit in New York Supreme Court challenging the city's distribution of a list showing the names, addresses and property values of hundreds of thousands of NYC homeowners. The suit also targets written notices the city mailed, informing 17,000 people on that list that they may be subject to the new tax.
The suit alleges that those actions "arbitrarily and capriciously foisted onto New York City residents the burden of proving they are not subject" to the tax, instead of the city first determining which properties are included.
On Monday, Judge Wayne Ozzi temporarily blocked the city from "taking any further action" in connection with the list or the mailed notices.
Hours later, an attorney for Mamdani said in a court filing that the city intends to file a motion for permission to appeal the ruling.
Doing so triggers an "automatic stay" of all proceedings to enforce Ozzi's order for the time being, the lawyer wrote.
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