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January 2, 2009
NYC Assessed Value
Here is a question—
NYC has been assessing the value of our brownstone for years for tax purposes and it has been below "market" rate. Now, I wonder what "market" rate really is for my brownstone as the assessed amount keeps mounting and the market keeps going down. The directly comparable brownstone on my block that is for sale hasn't sold on over 6 months.
It seems to me that assessed home values are another bubble and a way to keep revenue up for the city on the weakening backs of its citizens. But in a world where value is such a difficult thing to place, how does one know if/how one begins to pop it?
Comments
I think market prices have a long way to drop before they reach the assessed value given by the city. If they drop that far that will be the least of our worries.
Posted by: gennaro at January 2, 2009 8:34 AM
I wonder. My brownstone was just assessed at $1.5M and the brownstone down the street can't sell at $1.9. It is getting close--as in previous years (I've been in my brownstone now for 10 years and the assessed price is as one should expect, way way up) the percent spread between assessed and actual always seemed to lag significantly. Now they are so much closer to par in my opinion, with the market continuing to soften.
A 7% increase in RE taxes isn't something to just blow off. Assessments going up, up, up and tax rates going up in combination seems like a compounded increase in deflationary times. Not great. Seems like a back door for keeping revenue up for the city.
That said I do appreciate my city services...
Posted by: kensch at January 2, 2009 8:59 AM
The reason why the assesed value, and taxes, continue to rise is because they did not increase taxes at the same rate that homes appreciated. They did not want to cause payment shock for taxes. Conversely, because of this slower rate, it also takes more time for the assesed values to come to par with market value. Likewise, it will take longer for taxes to go sideways, or down for that matter. Hope that helps.
Posted by: Springs at January 3, 2009 4:49 PM
One to two family houses have a cap of 6%/year, 20% over five years. The assessed values were set in 1981, and were closer to the market value at the time; market values were assigned at that point because the state forced the city to do so, to conform to the way the rest of the state does it. Newer properties, condos or changes in C of O get assessed at the purchase price, generally, and then fall under the cap. The reason they keep raising the tax rate is that it is politically the easier way to raise taxes across the board; truth is that most NYC houses are undertaxed, but some are way over taxed; it is very unfair. This recent hike will actually be more like 13% next fiscal year because of the the 6% + the 7%; check it out when you get the new tax statement in March. I also wondered about how the slump could factor into tax protests, though, especially for people who are over taxed. If you really want to get the stats, check out NYPIRG's study of about 5 years ago. Gene Russianoff has been arguing for a reform of the system for fairness for some time.
Posted by: eFortGreene at January 3, 2009 9:41 PM
For my (PPS / Ditmas Park area) house, the "estimated market value" is $1.25 million. Less than what houses on the block sold for in '06, and I'd say a little over the current actual market value.
The "Assessed Value" is about 30K and annual tax about $4800.
I have noticed that houses in Brownstone neighborhoods that are worth a lot more than my house pay less in taxes. Coops are undertaxed because the market value is determined by using rental properties as comps, rather than comparable sales of other coops.
Posted by: Bklnite at January 5, 2009 10:25 AM
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