President Donald Trump said the federal government is exploring legal grounds to block New York's USD 500 million-a-year surcharge on luxury second homes, escalating the battle against the tax that a state judge already temporarily halted on 10 August 2026.
New York’s so-called pied-à-terre tax faces mounting legal pressure after President Donald Trump announced on 11 August 2026 that the federal government might challenge the surcharge on luxury second homes in the city.
The tax, designed to generate USD 500 million annually for New York City, has already been blocked temporarily. A Staten Island judge issued a preliminary injunction on 10 August 2026, halting its rollout as the constitutional challenge proceeds in state court.
Trump’s federal threat
Trump described the tax as a “dangerous political experiment” and stated the administration is examining whether federal law provides grounds to overturn it. The president’s escalating rhetoric against New York’s government—calling Mayor Zohran Mamdani’s administration “Radical Left Jihadists”—reflects a broader pattern of confrontation with Democratic leadership ahead of the midterms.
City’s defense
New York City’s administration said it will vigorously defend the tax in court. Mamdani and Trump have met twice previously, with their first encounter marked by unexpected civility despite disagreements over immigration and US policy in Gaza. The city did not immediately respond to Trump’s latest statement.
The pied-à-terre tax targets properties valued above a certain threshold owned by non-primary residents, a measure intended to address housing affordability and generate new revenue for the city. The legal battle will likely test the boundaries between state and federal authority over local tax policy.
Earlier, on 15 April 2026, New York Governor Kathy Hochul and Mayor Zohran Mamdani unveiled a joint proposal to impose a new tax on second homes valued above USD 5 million.
