President Trump on Wednesday evening signaled he was willing to cut federal funding for New York City if its newly elected mayor pushed ahead with a sweeping new tax on wealthy second homes. The warning landed on Truth Social and came in response to a plan the mayor unveiled alongside Governor Kathy Hochul this week — a proposal that would roughly double property taxes on New York’s most expensive second homes.
The so-called “pied-à-terre” tax would apply to properties valued at $5 million or more, with the mayor’s administration estimating it could generate as much as $500 million in annual revenue. Roughly 13,000 properties would be affected — many owned by out-of-state buyers, foreign investors, and Wall Street executives who have long made Manhattan a top destination for the ultra-wealthy.
In his Truth Social post, Trump framed the new tax plan as part of a broader pattern he believes is driving residents and businesses out of the city — and explicitly warned that federal money flowing to New York could be at risk.
“Sadly, Mayor Mamdani is DESTROYING New York! It has no chance! The United States of America should not contribute to its… TAX, TAX, TAX Policies are SO WRONG. People are fleeing. They must change their ways, AND FAST.” — President Donald J. Trump
Critics warn the tax proposal could set off a slippery slope where the threshold for taxation is quietly reduced over time — first to $3 million, then $2 million, and eventually targeting primary residences of those deemed “rich enough” by political leaders.
Real estate analysts caution that such a levy could accelerate the exodus of high-net-worth families from Manhattan to states like Florida, Texas, and the Carolinas, which have spent the last five years building aggressive campaigns to attract New York’s affluent residents.
The mayor’s administration argues the pied-à-terre tax is aimed at absentee luxury ownership, with proceeds earmarked for housing, transit, and school programs. However, opponents contend that even a $500 million annual revenue stream would not resolve New York City’s long-standing fiscal challenges.
This week’s developments have intensified the political standoff between President Trump and Mayor Mamdani, each leveraging their authority to shape the city’s fiscal future.