New York Metropolis Mayor Zohran Mamdani‘s proposed ‘millionaire dwelling tax’ is drawing consideration past second-home possession. By requiring homeowners of high-value secondary residences to ascertain whether or not a property is their major dwelling, the proposal additionally highlights a long-running concern of residency claims that overlaps with “storage fraud”. This can be a follow during which residents register automobiles in lower-cost states whereas primarily dwelling and driving in New York.The proposal has renewed scrutiny over so-called “ghost automobiles” and improperly registered out-of-state automobiles. Metropolis knowledge, investigative reviews, and enforcement companies have for years documented automobiles 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 intersects with automobile registration
Zohran Mamdani’s proposed pied-à-terre surcharge would apply to qualifying second properties in New York Metropolis. To find out whether or not a property qualifies as a major residence, householders may have to supply paperwork resembling state tax filings or driver’s licence data.That very same residency info may reveal discrepancies during which somebody claims residency outdoors New York whereas really dwelling within the metropolis and preserving 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 usually generally known as storage fraud, a recognised type of insurance coverage fraud.Based on a Streetsblog evaluation of New York Metropolis violation knowledge, 20,992 automobiles registered outdoors New York, New Jersey, Connecticut and Pennsylvania obtained no less than one visitors or parking violation in each quarter of the yr, 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 automobiles throughout all 5 boroughs. Of the 768 non-New York-plated automobiles, nearly one in 5 had licence plates that didn’t match the automobile or couldn’t be traced to a sound registration. The report additionally revealed:
- Automobiles with mismatched or “no-hit” plates owed practically 2.5 instances extra in excellent fines than correctly registered out-of-state automobiles.
- These automobiles paid solely 16% of their fines, in contrast with 63% for automobiles with legitimate registrations.
- Additionally they recorded 49% extra school-zone dashing digital camera violations and 74% extra fireplace hydrant violations, on common, than automobiles with matched plates.
Investigators additional reported that reproduction licence plates, expired government-issued plates and out-of-state registration companies have been overtly marketed on-line, making fraudulent registrations simpler to acquire.
New York is just not alone
New York has elevated enforcement lately. 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 automobiles.Comparable practices have additionally been recognized elsewhere within the US. California prosecutors have pursued instances involving the “Montana LLC” registration loophole used to keep away from automobile taxes, whereas Philadelphia has launched devoted enforcement towards ghost automobiles and fraudulent licence plates.
Italy and France face comparable registration schemes
The follow is just not distinctive to america. In Italy, authorities have focused a scheme centred round Naples during which drivers deregister automobiles domestically, re-register them by 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 automobiles not registered domestically, however 1000’s of Polish-plated automobiles stay concentrated round Naples.France has confronted a unique model of the issue. The nation’s state auditor, the Cour des Comptes, estimated that roughly a million illegally registered automobiles are working on French roads by fraudulent “ghost dealerships” that manipulate the nationwide automobile registry. The report linked the registrations to unpaid charges, tax avoidance, stolen automobiles and organised crime networks.Whereas the strategies differ, the frequent characteristic throughout New York, Italy and France is the usage of registration loopholes or false residency claims to scale back insurance coverage prices, keep away from taxes or evade enforcement.
