The publication of property data in New York as part of the preparations for a new "pied à terre" tax might not, in itself, represent a new shift in what is legitimate to put in the public domain, but it does raise questions about the proper way to handle such information.

There is a line you sometimes hear in films where a person tries to intimidate an adversary with the remark “I know where you live.”

Of course, since the dawn of civilization, governments have sought data on where citizens live so they can tax them. The Romans did it, Chinese emperors did it, the Norman invaders of England did it – even logging the figures in the Domesday Book – and countless regimes of varying democratic and undemocratic stripes have done so. 

A question arises, however, as to the extent to which knowledge about who owns what should be put in the public domain, making it easy for anyone of average intelligence to find. Another concern is how accurate such information is and whether it can be misleading and inflame hostility towards people.

Which brings us to Zohran Mamdani, Mayor of New York City, who introduced his “pied à terre” tax on second homes in NYC. It appears that the publication of data on those potentially in scope for this new tax has caused controversy, sparking claims that Mamdani, who has targeted HNW individuals as a source of revenue, is “doxxing” people. (The optics of all this were not helped by Mamdani issuing a video back in May in which he was filmed speaking outside hedge fund tycoon Ken Griffin’s home and looking through a hole in a door.)

Let’s leave aside the specifics of the new tax. (There is, as readers know, a debate out there about a possible wealth tax and other measures.) A question here is what is being done with the data that has been collected, and why it was published in the way it was. City Hall has issued an Excel spreadsheet containing more than 275,000 entries giving names of people, trusts, companies, various numbers and other entities. Addresses cover Manhattan, Brooklyn, Long Island, the Bronx, and other areas. It is unclear whether all the data can be used to collect the pied à terre tax. About 250 rows of the spreadsheet in the “Apartment” line refer to “RES”, “RESID”, “RESI” and “SUPER”, which are resident managers/superintendent entities, and presumably not in scope. It appears that City Hall may have issued details for far more properties than the release warranted. 

This is a lot of data – close to one million records, an executive in the financial services sector tells me who has looked at the figures. He says more than 95 per cent of the properties in this database fall below the value threshold applying to the new tax anyway. The median condo valuation on the roll is apparently about $250,000 – so it appears to be from some AI-driven searches. This begs the question of why so much of this data was issued.

(Family Wealth Report, our sister news service, has contacted City Hall about the matter; it had not received a response at the time of going to press.)

How big a deal is this? A lawyer who has studied the new tax told me this week that this episode is not necessarily an intimidatory act by Mamdani, given that the sort of information collected could have been obtained via other records. Even so, it is quite a step change to put it all in one place.  

International context may help us to judge what is going on. Countries such as the UK, US, those of mainland Europe and others typically will have forms of land registry and other databases that people can, with varying levels of access, check into. To use the Land Registry in England, for example, a person must fill out a form and pay a small fee. A journalist such as your correspondent has used UK Companies House, to give one example, to find out who the directors of a firm are and to scrutinise their accounts. A realtor [estate agent] can use various online and old-style paper records to investigate ownership. 

A problem is that currently where demands for transparency are loud, governments have – with some justification – sought to respond by putting more details about beneficial ownership into the public realm. But there are conditions to root out frivolous use of such information. Take the European Union. In November 2022, a move towards transparency under the Fifth Anti-Money Laundering Directive was reversed by the Court of Justice of the European Union, citing privacy worries. Presently, use of such information is restricted to certain groups that must show a "legitimate" interest – which begs questions as to how that's defined. (See my thoughts on that here.)

In the US, perhaps the most significant move was the Corporate Transparency Act (CTA), taking force from January 2024. To give one aspect of the law, the CTA significantly affects estate planning and trust administration. (See a comment here.) While trusts are generally not "reporting companies," they must disclose beneficial ownership if they own or control such entities. But the “vibe shift” in Washington DC with the new Trump administration has changed the game. The House Committee on Financial Services voted 26-25 on 21 April to advance legislation that would limit CTA reporting requirements to foreign entities and beneficial owners. 

It appears that the picture about disclosing beneficial ownership – with all the tax, privacy and other implications – resembles a patchwork at best, and a mess at worst. Wealth managers who want to establish the bona fides of their clients and conduct KYC and other checks may value databases of BO information – including second homes – but there is also a need to ensure that controls are in place so that those seeking such data have a valid reason to do so.

Given the security worries that many HNW individuals have these days – as explored here – it is not unreasonable to demand that whatever the justifications for a new tax and powers to collect it, a careful approach to publishing information from those targeted is warranted.