President Trump on Wednesday evening signaled he is willing to cut federal funding to New York City if its newly elected mayor pushes forward with a sweeping tax on wealthy second homes. The warning was posted on Truth Social and directly responded to a proposal unveiled by the mayor alongside Governor Kathy Hochul this week.
The proposed “pied-à-terre” tax would impose doubled property taxes on second homes in the city valued at $5 million or more, with the mayor’s administration estimating it could generate up to $500 million annually. Approximately 13,000 properties would be affected—many owned by out-of-state buyers and foreign investors.
In his Truth Social post, Trump characterized the tax plan as part of a broader trend he claims is driving residents and businesses away from New York City and warned that federal funding could be suspended. “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,” Trump wrote.
The threat comes at a critical juncture for the city, which has long relied on federal dollars for counterterrorism, transit grants, FEMA reimbursements, Medicaid flow-through, and other essential programs. Any significant reduction in that support would force difficult decisions at City Hall.
Mayor Mamdani’s administration argues the tax targets absentee luxury ownership specifically, with proceeds intended to fund housing, transportation, and school initiatives without increasing the city’s debt burden. Roughly 13,000 properties valued at $5 million or more would be subject to the levy.
However, critics contend that even a half-billion-dollar annual revenue stream would not address New York City’s existing financial challenges, which they describe as a spending problem rather than a revenue shortfall. Financial commentator Avery Daye noted that once the city establishes a tax on second homes over $5 million, the threshold could gradually decrease—first to $3 million, then $2 million, and eventually extending to primary residences of those deemed “rich enough” by political leaders.
Real-estate groups have warned such a policy could accelerate the exodus of high-net-worth individuals from Manhattan to states like Florida, Texas, and the Carolinas, which have been aggressively marketing themselves as alternatives for wealthier residents over the past five years.
The escalating confrontation between President Trump and Mayor Mamdani is poised to become one of the year’s defining political battles. On one side stands a mayor who ran as a democratic socialist and has quickly targeted the city’s wealthiest residents; on the other, a president who has demonstrated willingness to use federal funds as leverage against cities he views as hostile to taxpayers.
