Manhattan real estate: a little tax haven in America

From New York Magazine, a long article about the high-end New York property market, echoing recent stories (such as this one) about One Hyde Park and the British tax haven.

“Those with less reflexively hostile reactions to foreign buying competition might still wonder: Who are these people? An entire industry of brokers, lawyers, and tight-lipped advisers exists largely to keep anyone from discovering the answer. This is because, while New York real estate has significant drawbacks as an asset—it’s illiquid and costly to manage—it has a major selling point in its relative opacity. With a little creative corporate structuring, the ownership of a New York property can be made as untraceable as a numbered bank account. And that makes the city an island haven for those who want to stash cash in an increasingly monitored global financial system.
“With everything that is going on in Switzerland in terms of transparency, people are being forced to pay taxes on their capital that they used to hold there,” says Rodrigo Nino, the president of the Prodigy Network. “Real estate is a great alternative.”

It’s a very good article – not only because it quotes TJN’s Markus Meinzer. It contains plenty more on the tax and secrecy aspects: BVI companies, cash in suitcases, knowing winks from probable tax evaders, an effective 94 percent tax break for owners in New York’s swankiest address, an entity called Escape from New York LLC, and sales to every continent except Antarctica. There’s a 2013 study from the University of Utah whose authors conducted a survey by pretending to be genuine offshore clients: they not only found (as we well know) that the United States has been one of the world’s sleaziest ask-no-questions jurisdictions, but also that the suggestion of foreign corruption actually increased the likelihood that a provider would agree to do business.
Oh, and there’s this little British snippet:

“The owner of a $37 million unit, Novgorod LLC, was widely believed to be a Russian oligarch until it was revealed to represent the chief executive of the British bank Barclays. (He later resigned in a financial scandal, but the LLC still owns the apartment.)”

For more on how the United States became a secrecy jurisdiction, or tax haven, see the USA narrative report on the Financial Secrecy Index.