How Zohran Mamdani’s pied-à-terre tax exposed an epidemic of ‘ghost cars’ instead

New York City has long been plagued by vehicles registered outside the state to avoid high insurance premiums, despite being driven and parked within the city limits. Streetsblog discovered nearly 21,000 such vehicles, accumulating violations every quarter. The city's Oversight and Investigations Division surveyed over 3,500 vehicles, finding that one in five had fraudulent or mismatched plates and owed over twice as much in outstanding fines as properly registered cars.

Mayor Zohran Mamdani's newly proposed pied-à-terre tax, a surcharge for owning a second home in New York, is inadvertently serving as an extra tax auditor. To register as a New York resident, one must provide a driver's license or income tax records, and filing out of state while residing in the city technically makes one a non-resident and an evader.

This phenomenon, known as "garage fraud," is a national issue, with organized rings registering multiple vehicles at a single out-of-state address. New York's response has intensified, with Governor Kathy Hochul focusing on the issue in her 2026 State of the State address and California implementing a similar crackdown. The practice has even been dubbed the "Neapolitan scam" in Italy and France, where car owners re-register their vehicles in Poland to dodge high insurance taxes.

Italy's mandatory liability insurance costs up to €2,000 annually, while the Polish workaround brings it down to around €350 after the first year.