NY homeowners consider trusts and LLCs after pied-à-terre tax data release
The release of a city database listing over 680,000 properties potentially subject to a new surcharge has prompted many owners to explore trusts and LLCs for privacy, liability protection and estate planning, though the tax liability may still apply.
A recent disclosure by New York City’s Department of Finance listed more than 680,000 properties that could face a new pied-à-terre surcharge, exposing owners’ names, addresses and assessed values in a publicly searchable file. The data release has spurred interest among homeowners, from ultra-wealthy investors to middle-class families, in using legal entities such as trusts and limited-liability companies to shield personal assets.
Myles Fischer, a partner who co-leads the Trusts and Estates practice at Harris Beach Murtha, said the move toward anonymity is not limited to the rich. “The wealthy and the ultra-high-net-worth have been in this game for a long time. The rest are sort of catching up,” he told Fortune. Fischer explained that placing a property in an LLC or trust can protect owners from liability claims, such as a slip-and-fall injury, because a lawsuit would target only the entity’s assets, leaving personal savings, other real estate and retirement accounts untouched.
Beyond liability, Fischer identified three additional motivations for using such structures: organizing assets within an estate plan, avoiding probate and mitigating taxes. He noted that even owners of modest homes in Staten Island or Bayside may benefit, as a million-dollar house can represent a sizable portion of their overall wealth.
However, tax attorney Denisse Moderski of PKF O’Connor Davies warned that transferring property to a trust or LLC does not automatically eliminate the surcharge. “Even with a trust, the city has come out that they are applying a look-through,” she said. Under the look-through rule, the city treats the beneficial owner of an entity as the taxpayer, so a name change on the deed does not remove the liability for the tax.
Both experts agreed that while the restructuring can enhance privacy—removing an individual’s name from public records—it does not address the underlying tax assessment. Moderski observed an increase in inquiries from owners who are less familiar with estate planning but wish to keep their property information private.
Fischer suggested a practical solution: creating a standalone entity solely for holding real estate on public records, separate from an individual’s broader estate-planning structure. This approach could provide the desired anonymity without requiring a complete overhaul of existing plans.
The discussion underscores a broader point that estate-planning tools long available to the affluent are now being considered by a wider segment of New York homeowners after the city’s data release highlighted the extent of public exposure.