Brooklyn Brownstoners Pay Lowest Property Taxes

True, taxes are low in relation to property values. In relation to income however taxes are not the lowest. Also on absolute basis they are not the lowest. It all depends on your perspective. I couldn't afford to purchase my home now at it's current market value.

Posted by: Anonymous at December 5, 2006 9:23 AM

I pay about $1.20 sq ft - but it has Cof) of 4 family (different prop class) although currently used as 3 family. (of a market val maybe $1.4-$1.5 - purchased for $240k in 1986)
I wouldn't bother changing CofO because probably would reassess and pay way more in prop taxes.
I think the relying more on income tax as we do in NYC is better than other places that rely mostly on R.E. taxes.

Posted by: Anonymous at December 5, 2006 9:39 AM

With the weak schools and higher crime, who (besides myself 'cause I'm stubborn) would pay considerably higher prop. taxes in Brooklyn?

Posted by: Anonymous at December 5, 2006 9:48 AM

I love living in the city, but if I have to pay the City Income tax (you don't have that in the burbs), high property tax (like the burbs) and pay private school tution (some of the City schools are ok but most are not), I just couldn't swing it.

Posted by: Anonymous at December 5, 2006 9:58 AM

It is the 421a tax breaks that are cheating the city of tax income not small brooklyn homeowners. Contrary to stereotype, not all "brownstoners" are wealthy. Some of us are the ones who brick by brick are the reason their neighborhoods are stable and desirable today. In lots of neighborhoods, small homes ARE the affordable housing. 421a is an outrageous scam and has created very little affordable housing for all the hype about how great it is. In some neighborhoods, more affordable housing is being destroyed as condos are built next to small properties damaging them, sometimes deliberately. I do think commercial property taxes on small industrial buildings are often too high giving those property owners in mixed neighborhoods real incentive to sell out to developers and depriving residents of employment.

Posted by: Anonymous at December 5, 2006 10:12 AM

My taxes have doubled in Victorian Flatbush on a single family home in the last 6 years - I don't think services have increased six-fold, or that service costs have increased 500%!

While less than many suburbs, lower taxes have always been a part of the nyc real estate equation. Due in part to huge number of real estate units, and due in part to factoring in less-than-burb quality service, especially schools. However it seems to me that the current administration has been raising taxes much faster than previous ones.

The way the system works now, as property values rise, so too do taxes, often placing an insurmountable burden on current owners who may have purchased years earlier at much lower prices. Wouldn't it be more reasonable and better for the neighborhoods, to base real estate taxes on the sale price and collect any windfalls at the point of transfer?

Posted by: Anonymous at December 5, 2006 10:47 AM

Hi - Wanted to share our scenario: We payed just over 1.5M for our brownstone, and our taxes are about $1,000 per year for a two family in Prospect Heights. Thank goodness, because with our mortgage debt, we could not have afforded significant taxes.

Posted by: Anonymous at December 5, 2006 10:47 AM

Not all neighborhoods with brownstones enjoy such low taxes. Many residents of my neighborhood always assumed racism and patronage helped out the taxpayers of generations ago in areas like Park Slope and Carroll Gardens and now those low rates are a fixture in those neighborhoods.

Posted by: Anonymous at December 5, 2006 11:45 AM

I have @ 2250 sf in a 3-story, Park Slope between 4th and 5th Avenues. I'm guessing it's worth $1.1 or $1.2M market? We pay something like $2500/yr before the rebate.

On the one hand, it's totally unfair and goes against my sense of social justice. On the other hand, BWAHhahahahahahahaha!!!

Seriously, what about changing the law so that the taxes get readjusted based on the full market values when the house is sold? That would avoid screwing the poor old guy who's lived in his house for 50 years, but it properly taxes the new owner of said house when he buys it for $2M--if the guy can afford a $2M house, he's got no kick coming.

Yes, that would probably lower the sales price of the house, but for said 50-year owner, that's a couple hundred thou off of a million-plus windfall, and more equitable for all.

Posted by: Anonymous at December 5, 2006 11:48 AM

Aren't there people out there who have made improvements to their homes without filing it with the DOB? If you're not changing the CofO, what is your incentive to file?

Posted by: Anonymous at December 5, 2006 12:05 PM

Something missing from this article:

Property taxes on assesed values can only increase so much each year. The TRUE (eventual) property taxes on $2m brownstones are going to be, eventually, 2x or 3x or more what the current owners are paying. Essentially the recent fast rise in prices out-stripe the ability of the taxes to follow them up.

The rises are graduated in at hardly more than inflation rate. This is the law. Over the longer term (5-10 years, hardly anything in the life of a brownstone), property taxes WILL rise and drive out the cash poor asset rich brownstone owners, or drive them to sub-divide and rent out floors to keep their mansions.

Posted by: Anonymous at December 5, 2006 12:29 PM

we in bay ridge have higher taxes, we are currently 4K for a 2600sf two family (1910 limestone)....

Posted by: Anonymous at December 5, 2006 12:37 PM

anybody have an answer? I have a legal 3 family (Cof O) that is on the tax rolls as a 4 family, currently paying over five thousand a year in taxes.
Would it be worth applying for class one status (1-3 family units) from class two (4 family and above)? What are the dangers of trying to change classifications? Thanks.

Posted by: Anonymous at December 5, 2006 1:28 PM

1:28... I am too lazy to do the search, but I believe there was an NYT story on homeowners who get absolutely HAMMERED on prop taxes when the C of O changes ... something having to do with the fact that the taxes are reassed without a cap in such situations, I think. But I can't swear to it.

Posted by: Anonymous at December 5, 2006 1:37 PM

1:37, I posted at 1:28. My c of o is a legal three family but the tax office still has it as a four. I don't have to change the c of o, just change the tax status by bringing a copy of the c of o to the dept. of finance. Should I do it and what are the risks?

Posted by: Anonymous at December 5, 2006 1:45 PM

RE: "It is the 421a tax breaks that are cheating the city of tax income not small brooklyn homeowners." Get a clue. David has it right. The City loses nothing from the 421A. Over a short period those deferments go out the window and in my opinion is when real estate in NY will tank. All of those expensive apartments will now have higher taxes while the bleeding heart, we built our neighborhood brownstoners are still getting a free ride.

Posted by: Anonymous at December 5, 2006 2:09 PM

1:28, it looks from the NYT article like you should be OK, as it's the 4-family and larger owners who were hit hardest. Actually, you may even reduce your taxes, though I'm not an accountant:

http://www.nytimes.com/2005/02/20/realestate/20cov.html?ex=1165467600&en=36751b4cf5f600a4&ei=5070

Posted by: Anonymous at December 5, 2006 2:22 PM

forgive me, but aren't property taxes were deductible?

Posted by: Anonymous at December 5, 2006 3:31 PM

1:28, I recall reading that it was the legal 4 fam houses that were getting hammered the worst; in fact, converting to legal 3 family status was the solution for these townhouse owners in manhattan who were in serious trouble as 4 families...even though you potentially lose 1/4 of your rent roll (or 1/3 if you live in one of the units yourself) the tax savings more than compensated for the loss of one unit's rental income.

i would recommend that you consult with an accountant who specializes in NYC property taxes FIRST - do not go to the DOF until you are absolutely positive you will save money.

Posted by: Anonymous at December 5, 2006 3:55 PM

This whole tax system here is psychotic. I live in a condo worth about $700k, and have a 14 year J-51 tax abatement. The J-51 is an incentive for investment/redevelopment in targeted neighborhoods as determined by the City. Developers and buyers obviously love these programs.

So right now everything is fine and dandy, but without the tax break my apartment's tax rate would be over $7 per square foot! Insane! How can brownstones that sell for 2million right now only pay less than one third of that rate? What's with that? And those posters that pay .50 per square foot. Ugh...not exactly what I would call fair.

And remember, before you rag on me for getting a free ride, this is a different animal than a 421a, PLUS, within a year of closing, The City jacked our rate up FOUR TIMES from the estimate that was given in the prospectus. Talk about legal extortion.

Posted by: Anonymous at December 5, 2006 4:31 PM

We pay about $11,000.00 a year in taxes on our 4-family brownstone in Clinton Hill. I researched this some years ago and found no comps in the area paying anything close, so I took it to the Department of Finance who pointed out that my taxes are based on an assessment wildly lower than market value. This system treats housing property primarily as an investment as opposed to a home. I'm certainly not unhappy that my home has jumped 500% in market value since I bought it eight years ago, but I have absolutely no interest in selling it now, so the appreciation serves only to hike my taxes even more. Maybe taxes should be reapportioned to be lighter on resident/homeowners who stay put, who in my experience have a more positive impact on the neighborhood, and heavier on the quick-turnaround stripmining investor. I'm not holding my breath in this climate, though.

Posted by: Anonymous at December 6, 2006 12:37 PM