New York's mayor Zohran Mamdani abandons 9.5% property tax by imposing new $500 MILLION levy on billionaires

New York City Mayor Zohran Mamdani has dropped his proposed 9.5 per cent property tax increase after securing $4billion (£2.96billion) in state funding.

The 34-year-old mayor had warned in February that the substantial levy on more than three million residential and commercial properties would be necessary as a "last resort" should he fail to convince Governor Kathy Hochul to implement wealth taxes.

A key component of the state funding package is a new "pied-à-terre" tax targeting the super-wealthy.

It is estimated to generate $500million (£370million) annually from second homes valued at $5million (£3.7million) or more.

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The measure forms part of Mr Mamdani's broader "tax the rich" strategy to address the city's fiscal challenges.

Mr Mamdani unveiled the new tax in a video recorded outside a $238million (£176million) penthouse owned by Ken Griffin, situated on the exclusive stretch of Manhattan known as Billionaires' Row.

The hedge fund billionaire reacted angrily to the stunt, describing it as "creepy and weird" and claiming the mayor's campaign had caused him "trauma".

Mr Mamdani defended his approach, arguing that individuals such as Mr Griffin possess extremely valuable properties that frequently sit empty, representing a "fundamentally unfair system that hurts working New Yorkers".

The levy specifically targets "those who store their wealth in New York City real estate but don't actually live here", according to the mayor.

The city's new $124.7billon (£92.4billion) budget comes amid what Mr Mamdani has characterised as a generational fiscal crisis comparable to the Great Recession, with a $5.4billion (£4billion) shortfall.

For months, the mayor has warned that New York faces an extraordinarily difficult financial situation that requires urgent action.

Beyond state funding, Mr Mamdani has identified $1.2billion (£889million) in savings by tackling inefficiencies across various programmes, including special education.

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The combined measures of state support and internal savings have enabled the mayor to balance the budget without imposing the threatened property tax rise on ordinary homeowners and businesses.

His "tax the rich" approach has focused on extracting revenue from ultra-wealthy individuals and major corporations rather than burdening working residents.

Mr Mamdani's wealth-focused policies have drawn fierce criticism from Donald Trump, who attacked the mayor on Truth Social last month.

The US President wrote: "Sadly, Mayor Mamdani is DESTROYING New York! It has no chance!"

He added: "People are fleeing. They must change their ways, AND FAST.

"History has proven, THIS 'STUFF' JUST DOESN'T WORK."

Despite opposition from billionaires and business figures, Mr Mamdani secured victory in last November's mayoral election, becoming the youngest person to hold the office.

He achieved this without significant financial backing or endorsement from the Democratic Party establishment, propelled instead by voters concerned about rising living costs in the city.

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