Dept. of Finance Market Values
We just got a notice from the Dept. of Finance stating the “market value” for our brownstone. We just bought the place in November 2009. It’s a 3-family in park slope. We paid $1.695 and DOF has valued it at $1.97. So that’s roughly $300,000 over what we paid (and we paid the asking price)….
We just got a notice from the Dept. of Finance stating the “market value” for our brownstone. We just bought the place in November 2009. It’s a 3-family in park slope. We paid $1.695 and DOF has valued it at $1.97. So that’s roughly $300,000 over what we paid (and we paid the asking price).
The DOF letter includes instructions for what to do if we’d like to dispute this valuation.
My question is: should we? The case we would make would be that it’s worth what we paid, I suppose.
Interestingly the DOF statement also notes a drop in market value from the previous year, 2007 I think, when it had been valued at $2.1 something.
I’m sort of thinking it might be best to let sleeping dogs lie… also it sounds easier.
I’m pretty sure we are paying very low property taxes in NYC in general, so this seems like it may not matter. Maybe there are even reasons having a higher value makes sense.
Advice? Thoughts?
thanks
Send ’em this…
http://tinyurl.com/y8k6msc
“House Price Recovery Just A Head Fake, Says Alpert, Especially In New York
In the second half of 2009, house prices staged a surprising recovery, leading many to conclude that the housing bust was done.
Keep dreaming, says Dan Alpert of Westwood Capital.
The rise in the second half of 2009 was mainly the result of pent-up demand combined with a tax-break, subsidized mortgage rates, and other incentives. The housing market is still awash in excess inventory, and Alpert says this will eventually drive prices down to 8%-10% below the lows of early last year [much worse for NYC – BHO].
The good news?
House prices should bottom this year and then begin to recover. Also, for the hardest hit areas, such as those in California or the sand states, the bust is probably over. Prices have fallen so far in those areas that Alpert thinks they’re bottoming now.
So where is the sky still falling?
Places where price-to-rent ratios are still well above historical norms [like 10x annual? – BHO], such as New York City.
A staggering amount of excess inventory means the housing crash in NYC is alive and well, Alpert says.”
Don’t worry, slopegirl! Your taxes will fall tremendously over the next few years.
***Bid half off peak comps***
The actual Notice of Property Value that homeowners receive by mail (i.e., the actual two pieces of paper enclosed in the envelope), regardless of whether 1-3 family, 4+ family, and (I have to assume) condo or co-op, is filled with detailed information on how the valuation was reached for your specific property, how to obtain certain exemptions, and how to and what the deadlines for disputing assessments. Similar information is available through the DOF link posted earlier. None of the math is rocket science, nor is the actual procedure for disputing an assessment. No attorney required, unless you’re partial to throwing money away.
The market value used for my condo went up approx 16% this year. Since it is based on rental value, doing the math is still no where near what I can truly rent it for. So I am not really complaining.
I guess others are right though, the city and state are in deep sh*t and looking to squeeze revenues from any source possible. If you feel like you are not being fairly assesed, you have nothing to lose by protesting.
I live in a condo and got a similar notice, almost doubling the market value of my apartment. However, the figure is still significantly below both what I paid for the apartment in 2002, and what I estimate it would sell for now.
Presumably the city is doing this across the board to maximize its tax revenue in a time of recession.
In OP’s case, however, I find it remarkable that the stated market value is $300K over what the property sold for as recently as November 2009. To other brownstone owners: are you seeing the same kind of increase? While in my case, I assume it’s fruitless to contest the valuation since it’s still below the actual market value, I think it might be a different story when the city is valuing a house for well above the actual market value. OP: talk to a lawyer!
There is a lot of misinformation above. For most 1-3 family brownstone owners in Park Slope and similiar neighborhoods, the market value on the DOF will not affect your taxes. That is because the rate increases are capped year over year, so effectivelty, in a case like yours, your taxes would only go down if the value was something like 500k (for example). The value would matter only when those yearly increases finally hit reality, which for most brownstones will take like 10-20 years.
Keep in mind if you do a renovation and file it, the market value increase due to the renovation (e.g. 100k improvement) would be taxed immediatly, and isn’t part of the year-over-year cap.
This 6/20 limitations are for three families or less. More than that gets a different law and not the same break. Condos and Coops(above 4 units in a building I believe) by state law are treated exactly as rentals…
*do make very little sense
Real estate taxes can go up more than 8%.
The law is you taxable value may increase no more than 6% per year and 20% over five years. However the tax rate may be increased by the City Council with out limit. That is what happened a few years ago when the rebate was implemented. The Tax rate was increased by 20% or more but you were given $400 back.
In most cases in Brooklyn Brownstone areas you are taxed on a value that is significantly less than the target value(also on the form). Until the tax value and the target value are the same an appeal of the valuation is almost meaningless. The normal way an attorney charges for this is based on the reduction which can be very expensive even when it doesn’t impact your taxable value.
hunh? how is answering the OP’s question accurately “bitter”? I don’t have a problem with the RE taxes I pay (quite the opposite), but a) the DOF market values do many very little sense relative to the actual housing market, and b) the DOF market values do impact the taxes we pay. Those are incontrovertible facts.