Donald Trump’s $500m (£370m) fine for real estate fraud has been thrown out by a New York appeals court.

The decision upheld a previous fraud ruling against the US president but determined that the penalty imposed was excessive.

“While harm certainly occurred, it was not the cataclysmic harm that can justify a nearly half-billion-dollar award to the state,” the court ruled.

Mr Trump, who as of June was reportedly worth $5.1bn (£3.8bn), according to Forbes, praised the court for having the “courage to throw out this unlawful and disgraceful decision”.

Letitia James, the New York attorney general who brought the case, declared she would appeal the decision and noted that the court had not dismissed the fraud ruling against the president.

The case left the court’s five judges deeply divided, with two in favour of upholding the fraud ruling but dismissing the penalties, two in favour of holding a new trial, and one who argued in favour of dismissing the case altogether.

Unusually, the two judges who supported a new trial joined the opinion of those who upheld the fraud finding, allowing the case to move on to the court of appeals.

In September 2022, Ms James claimed Mr Trump and his family had engaged in “persistent and staggering fraud” by overvaluing and undervaluing his assets in statements to banks and insurers.