President Donald Trump has taken aim at Mayor Zohran Mamdani’s initiative to levy an extra tax on New York City pieds-à-terre, which is already embroiled in a bureaucratic tug-of-war in the city's courts.

Mamdani unveiled a new element of his administration’s “tax the rich” policies in mid-April, announcing a new annual charge on New Yorkers’ second homes.

The measure has been challenged in court and dissed by the country’s leader in the past week, leaving potential buyers confused, condo developers and property managers said at Bisnow’s New York Condos event Tuesday. But they don’t expect the policy to have a long-term impact on sales.

“We have a lot of people that are upset about it,” Peninsula Property Management President Joel Davis said onstage at Convene One Liberty Plaza. “It's definitely a contentious point right now.”

Under the policy, owners of one-, two- or three-family second homes will face a new 0.8% to 1.3% tax based on their properties’ market values.

Condos and co-ops would be taxed between 4% and 6.5% in the first year, but likely at a lower rate after the city determines the units’ “assessed values,” according to The City Reporter.

Mamdani and Gov. Kathy Hochul announced the proposed pied-à-terre tax during the state government’s spring budget negotiations, after months of friction over City Hall’s proposal to impose extra income taxes on the city’s top earners — a move that would have required state approval. 

The pair ultimately agreed that the second homes tax was a reasonable target to fill the city’s budget gap.

“If you can afford a $5 million second home that sits empty most of the year, you can afford to contribute like every other New Yorker,” Hochul said in a mid-April release.

But the policy has continued to be a source of public consternation as the deadline to apply for exemptions, originally in late August, but later extended to Sept. 18, has drawn closer.

Last month, the Mamdani administration published a searchable database of the 17,000 residences eligible for the tax, which the Department of Finance told the New York Post it is required to do by state law.

The decision prompted outrage and concern from residents, who said they were notified that they might be subject to the tax in homes that they lived in as their primary residences. 

And the past week has provided three fresh twists in the saga. 

A trio of homeowners sued to stop the rollout Friday, leading to Staten Island Judge Wayne Ozzi calling for a temporary halt to the tax Monday. That pause was stayed almost immediately when the city appealed, and that was followed by a Tuesday Truth Social post from President Donald Trump announcing he was looking for legal avenues for the federal government to intervene.

“This dangerous political ‘experiment’ will destroy what was once a great City and State,” the president wrote, calling the move “pure Amateur Hour.”

However, developers onstage Tuesday were skeptical that the policy will hurt NYC’s condo market in the long term.

“Will it have an impact? Sure,” Toll Brothers City Living Vice President of Development Todd Dumaresq said. “But is it going to be this dramatic rewriting of the market? I'm not so sure. I think New York is resilient and pretty creative, and we will weather this well.”

The policy confusion does appear to have caused a short-term slowdown during the spring. Second-quarter sales data from brokerage Douglas Elliman shows the previously red-hot condo sales market in NYC had slowed in the months of uncertainty introduced by the tax proposal.

The government's delay in spelling out details caused the market to ebb momentarily, Elad Group Executive Vice President of Marketing & Sales Elyse Leff said.

“Obviously, there was a pause in the market when that was completely unknown,” she said. “Nobody was aware of how much it would be and who it would affect.”

The type of condos going into contract changed in Q2, according to Douglas Elliman. The number of signed contracts in the sub-$1M market grew by 37% quarter-over-quarter. Contracts for properties in the $1M-$3M and the $3M-$5M range tiers grew by 26% and 16.4%, respectively, over the same period.

Deal volume for properties starting at $10M, meanwhile, declined by almost 27% during Q2 2026.

“The resident who maybe a couple years ago was shopping for a $2.5M to $3.5M home, now they're shopping for a $1.5M to $3M home,” Charney Cos. Head of Development Rosie Tilley said. 

The upper segment of the condo market had all but frozen by early July, the New York Post reported at the time. Only one trophy home valued at more than $10M entered into contract between July 6 and 12, in contrast to the three to five deals of that size that normally enter into contract every week.

But developers think those deals will return, they said at Bisnow’s event.

Buyers who pay upward of $10M for apartments aren’t going to think twice, Avdoo Senior Vice President of Design and Marketing Steve Rutter said.

If there is any segment of buyers who might reconsider, it could be those who are budgeting in the $3M-$5M range, he said, although he thinks that a slowdown is unlikely.

“It will get factored into the market,” he said. “It will take a little while for everybody to accept it, and then it will be business as usual.”