In 2016, New York City Mayor Bill De Blasio said that property tax rates would not be increasing for the 2017 fiscal year. On the surface, this statement about NYC property taxes would cause property owners to breathe a sigh of relief. Realistically, who enjoys paying higher property taxes? Nobody!
Over $1.3 Billion More in Property Tax Revenues!
For the 2017 fiscal year, property taxes will account for 29% of the city's revenue. In the 2016 fiscal year, which ends June 30th, 2017, the city will have collected $22.5 billion. For the 2017 fiscal year, the city expects to collect $23.8 billion. How can the city collect $1.3 billion more year over year without increasing the tax rates? You must not have read in between the lines.
Mayor De Blasio said he would not increase the tax rates. The fine print here is that property valuations are set to increase for the 2017 fiscal year, which enables the city to collect higher revenues by multiplying the same tax rate by increased property values. New York City's property tax assessment has everyone on high alert, from major landlords all the way to condo and co-op owners.
According to a New York Post article published in January of 2017, the full market value of New York City property has exceeded $1 trillion for the first time in history. Property values across NYC grew by 8.74% for a total value of $1.157 trillion. That's a big number! So who gets impacted by this large increase? Everyone. If you rent, your rent will go up. If you own, your quarterly tax bill will go up. It is unprecedented how quickly property tax assessments have been increasing in NYC to fund the current administration's ambitions.
Downside of High Property Taxes
Higher property taxes have a significant impact on owners and would-be owners. High taxes add to the overall monthly expense of maintaining a property. Therefore, the higher this monthly expense, the larger the impact on potentially dampening resale prices. Additionally, this increased burden may encourage people to move and sell altogether. On the flip side, you may find would-be buyers who forgo ownership altogether.
Calculate your Property Taxes
We've put together a step by step guide on how you can analyze your New York City property taxes. Click here to evaluate them.
Fight your Property Taxes
Yes, there is a way that you can contest your property tax assessment. The process is quite burdensome, but it can be done in several ways:
- Challenge them yourself by going to: http://www1.nyc.gov/site/finance/taxes/challenge-your-assessment.page
- Hire a tax certiorari to fight your case for you. Companies in NYC include: Stroock & Stroock & Lavan LLP as well as Podell, Schwartz, Schechter & Banfield, LLP
When you hire a certiorari to fight your property tax assessment, they will take a portion of your savings as their payment for services. However, it's important to note that just because these services exist doesn't mean they're going to be successful in reducing your tax burden.
What if your Property is subject to the 421-a Tax Abatement?
If you're unsure of the the 421-a Tax Abatement, then you will benefit from this read. Ultimately, if your property has a tax abatement in place, you won't be significantly impacted by increased property valuations in the near term. In the long-run though, the increased property valuation blended with the market-rate tax rate will become a large tax burden.
Nobody likes paying higher property taxes, so do your part in letting your administration know. Looking to understand the tax structure of a property you're looking to purchase? Don't hesitate to reach out and learn more.
Another interesting read regarding this topic: http://www.politico.com/states/new-york/city-hall/story/2016/01/de-blasio-boasts-of-flat-property-taxes-though-bills-will-rise-for-many-030344
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