A rant on Manhattan RE tax...

yet another example of the degeneration of the Forum.

Posted by: guest at January 18, 2008 9:49 AM

30,000/ year on a 1.8 Mil condo is not so bad.

Try LI where people pay 10-18K for 600K to 800K homes.

Posted by: guest at January 18, 2008 10:23 AM

RE taxes are very very relevant to discussing where to buy.

Long Island RE taxes are C R A Z Y. We know someone with one of the $600K typical 3BR ranch style houses on which they pay $18,000 a year RE taxes. This is not for the Hamptons, btw, this is just for a town near Rockville Centre.

It's exactly why I don't feel all that panicky about Brooklyn property values. If people start looking at the option to leave Brooklyn to buy in the suburbs instead, or buy a smaller place in Manhattan, they will find out about the nutty RE taxes outside Brooklyn. Even nice parts of CT have lower taxes than LI or upstate NY on the Metro North lines. But even in CT, we found we'd pay $10,000 a year taxes on the smallest size house we could tolerate in a good school district (good school district being the only reason to leave the city for the suburbs, otherwise we'll just pay for private schools here).

Posted by: guest at January 18, 2008 10:32 AM

Yep, I know people in NJ and LI who live in VERY modest homes in very modest neighborhoods and pay through the nose. I don't get it.

Posted by: guest at January 18, 2008 11:20 AM

Single and two family houses in Brooklyn typically have very low RE taxes, because politicians have capped the amount they can rise. Apartments do not enjoy the same cap, so taxes for them have risen much more. There was an article in the NY Times about it last year I think. Plus, as others say, its way worse elsewhere. My brother lives outside Rochester in a 250K house and pays twice what I pay in real estate taxes on my triplex with garden rental that's worth well over a million. LI is out of control - but they do have some excellent school systems (and some very highly paid police officers).

Posted by: guest at January 18, 2008 11:39 AM

Taxes are less in the city because there is corporate tax base that contributes to taxes, where the suburbs are largely residential.

Posted by: guest at January 18, 2008 12:40 PM

12:40 isn't wrong, but 11:39 hints at a good point: city residential taxes are low, but we pay for that with subpar public schools. I expect the price you're seeing in tribeca is for the year.

An overlooked benefit from NYC real estate (provided you don't have children or they've grown up) is that you save a lot of money in the long run with these low taxes...hundreds of thousands of dollars, in some cases, over several decades.

Posted by: guest at January 18, 2008 1:23 PM

Real Estate Taxes are the same in all 5 boroughs. For Residential property in class1, all 5 boroughs pay the same rate. Class 2 rates for condo and coops. TO say that a manhattan property has a bigger tx means the property has a greater value. All property taxes are add valorem, accoridng to value.

Remember that most older properties are capped as to the amount their assessments can increase. New buildings are also capped but begin with greater values than older properties. In order to see what the taxes are you need to tell us what the assessed and market values for that property is.

Posted by: guest at January 18, 2008 3:30 PM

NYC can maintain low residential real estate taxes because it has many other sources of revenue, such as personal and corporate income taxes. It also has very high taxes on commercial real estate. Unlike the rest of the state, funding of our school system is not based on property tax revenues, so the subpar schools aren't a result of low property taxes but of a host of other problems. When you put all our taxes together, you're probably paying about the same in total taxes as if you lived in the suburbs.

One of the impacts of low property taxes is higher home prices, that is, the savings on taxes are capitalized into the price of the house. It's an obstacle for first time buyers who have to save up more money for their down payment.

Posted by: guest at January 18, 2008 4:38 PM

Also remember in the suburbs you're STILL paying those very high RE taxes after your kids are done with public school.

Posted by: guest at January 18, 2008 5:30 PM

What is the "School Tax Relief" exemption? I've noticed there are quite a few houses in Brooklyn that have it. Is it substantial or is it negligible?

Posted by: guest at January 18, 2008 6:30 PM

People, NYC has an income tax. That's on top of the state income tax. Burbs don't. The highest tax bracket in the city is around 5%. Do a little math, and if you make a good salary, you'll find you're already paying more than the burb dwellers. Don't feel sorry for them. Feel sorry for yourself, as if you live in NYC, you're taxed like a European.

Posted by: guest at January 18, 2008 6:51 PM

STAR exemptions are available for any homeowner, kids in school or not. There is an enriched exemption for seniors, as well. You can find applications on the City Finance Dept website. They exempt about $1250 of your assessed value from taxes, saving something like $150-$200 per year in property tax.

The top city personal income tax rate is about 3.85 percent, fyi.

Posted by: guest at January 19, 2008 12:55 PM

Problem is, 6:51, those in the suburbs are taxed high property taxes even after they retire and stop making income. They pay that high property tax even if they are out of work for months or a year, not making income. And they are taxed high property taxes even after their kids leave school.

I would rather pay our NYC income tax, being freelancers with irregular income from year to year (like many people in media who live in NYC) than be saddled with HUGE property taxes that are only going up and up and up.

Posted by: guest at January 19, 2008 1:26 PM