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June 14, 2009
New condo property tax
I was extremely surprised to find out that the post 15-yr abatement the property tax on a studio condo in a rather fringe location will rise from 30$/month to ...700$/month. I understand that it should increase substantially, up to 10 times, but this is quite an increase. The broker maintains this is completely normal and i should not worry to ever have to pay that as there "will be new abatements" etc. Does such disproportionate increase means this condo is in a particularly unfavorable situation tax-wise? what drives the estimate for RE tax post-abatement? where can I turn for the information? Really appreciate your input!
Comments
that is pretty standard...that is why you tax abatements are a joke on the buyer...do you really think that there will be future tax abatements in the current economic climate, with the state starved for money?..the broker is flat out hustling you
Posted by: eman1234 at June 14, 2009 8:36 PM
And now you know why coop maintenance is so high -- most coops are paying nearly 100% of their real estate taxes (ex. slight abtements for capital improvements)!
Posted by: BH76 at June 15, 2009 9:25 AM
$700 per month (i.e. $8,400) seems incredibly high for a condo that is not ultra luxury. We have a tax abatement that went into effect about 6 months after we purchased about 2 years ago. The unabated Tax was approximately $170/ month before the abatement. Now it is $30.
Dont know if it is apples to apples, but the assesed value for a condo is based on the "Rental Value" for 12 months at a rate of something like 13%. That would imply your place would rent for something like $5,400 per month ($8,400/13%/12).
Assuming my math is correct, and based on your description of the property - This seems unlikely.
Posted by: newsouthsloper at June 15, 2009 10:33 AM
Perhaps they are calculating "taxes per unit as percent of income" -- if it's 25 percent of income (as some properties are) then $8,400 in taxes assumes monthly income of about $2800, which might be a stretch for a condo you describe but not as bad as newsouthsloper's calculation.
And your broker predicting that there will be new abatements sounds like broker magical thinking.
Posted by: Back40 at June 15, 2009 11:22 AM
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