New York Metropolis Mayor Zohran Mamdani‘s proposed ‘millionaire house tax’ is drawing consideration past second-home possession. By requiring homeowners of high-value secondary residences to determine whether or not a property is their major house, the proposal additionally highlights a long-running situation of residency claims that overlaps with “storage fraud”. This can be a observe through which residents register autos in lower-cost states whereas primarily residing and driving in New York.The proposal has renewed scrutiny over so-called “ghost vehicles” and improperly registered out-of-state autos. Metropolis knowledge, investigative reviews, and enforcement companies have for years documented autos repeatedly showing on New York streets with out-of-state registrations, mismatched plates, or fraudulent registrations, elevating questions on unpaid fines, insurance coverage evasion, and tax compliance.
How New York Metropolis Mayor Zohran Mamdani’s proposed tax offers with automobile registration
Mamdani’s proposed pied-à-terre surcharge would apply to qualifying second houses in New York Metropolis. To find out whether or not a property qualifies as a major residence, householders might have to offer paperwork reminiscent of state tax filings or driver’s licence information.That very same residency info might reveal discrepancies through which somebody claims residency outdoors New York whereas truly residing within the metropolis and holding a automobile there. New York insurers calculate premiums primarily based on the place a automobile is primarily garaged, making false out-of-state registrations, which is often generally known as storage fraud, a recognised type of insurance coverage fraud.In accordance with a Streetsblog evaluation of New York Metropolis violation knowledge, 20,992 autos registered outdoors New York, New Jersey, Connecticut and Pennsylvania acquired at the least one site visitors or parking violation in each quarter of the 12 months, a sample suggesting many could also be pushed in New York year-round regardless of being registered elsewhere.
What investigators discovered
In 2025, the New York Metropolis Council’s Oversight and Investigations Division carried out a survey of greater than 3,500 parked autos throughout all 5 boroughs. Of the 768 non-New York-plated autos, virtually one in 5 had licence plates that didn’t match the automobile or couldn’t be traced to a legitimate registration. The report additionally revealed:Autos with mismatched or “no-hit” plates owed almost 2.5 occasions extra in excellent fines than correctly registered out-of-state autos.These autos paid solely 16% of their fines, in contrast with 63% for autos with legitimate registrations.In addition they recorded 49% extra school-zone dashing digital camera violations and 74% extra hearth hydrant violations, on common, than autos with matched plates.Investigators additional reported that duplicate licence plates, expired government-issued plates and out-of-state registration companies had been overtly marketed on-line, making fraudulent registrations simpler to acquire.
New York isn’t alone
New York has elevated enforcement in recent times. Governor Kathy Hochul has made ghost plates and registration fraud a part of statewide enforcement efforts, whereas companies together with the State Police, DMV and Thruway Authority have carried out coordinated operations focusing on improperly registered autos.Comparable practices have additionally been recognized elsewhere within the US. California prosecutors have pursued circumstances involving the “Montana LLC” registration loophole used to keep away from automobile taxes, whereas Philadelphia has launched devoted enforcement in opposition to ghost vehicles and fraudulent licence plates.
Italy and France face comparable registration schemes
The observe isn’t distinctive to the USA. In Italy, authorities have focused a scheme centred round Naples through which drivers deregister autos domestically, re-register them via long-term rental preparations in Poland after which proceed driving them in Italy utilizing Polish licence plates to scale back insurance coverage prices.In 2022, Italian authorities prohibited residents from driving foreign-plated autos not registered domestically, however 1000’s of Polish-plated autos stay concentrated round Naples.France has confronted a distinct model of the issue. The nation’s state auditor, the Cour des Comptes, estimated that roughly a million illegally registered autos are working on French roads via fraudulent “ghost dealerships” that manipulate the nationwide automobile registry. The report linked the registrations to unpaid charges, tax avoidance, stolen autos and organised crime networks.Whereas the strategies differ, the frequent function throughout New York, Italy and France is using registration loopholes or false residency claims to scale back insurance coverage prices, keep away from taxes or evade enforcement.
