Renovations and taxes
It’s not just Park Slope, it’s neighborhoods with 1-3 fams that have shown tremendous price gains since the 1970s. UWS too. Here’s a $6m house with $30k in taxes. As a percentage, it’s half of what the Carnasie house pays. https://www.zillow.com/homedetails/11-W-74th-St-New-York-NY-10023/31518929_zpid/

chemosphere
in General Discussion 1 year and 2 months ago
33
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jimyjames.robert96 | 1 year and 2 months ago
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Does anyone have information on how much taxes increase after a renovation on a 2 Family Home? And how this relates tot he cost of the renovation on an A2 or A1 permit? Is there math on how this is computed?

cate | 1 year and 2 months ago
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My understanding is that if you file for an Alt-2 and the renovation is “substantial” (not sure how this is calculated — percent of property updated, total cost, something else, all of these) or if you file for an Alt-1, then a year after the reno is signed off on the yearly cap on tax increases will sunset and you will be taxed at the full market value of your property. An architect or expediter may be able to answer this question definitively. It’s possible to renovate without needing an Alt-1 or Alt-2 if, for example, you don’t move wet-room fixtures nor walls.

Lurker | 1 year and 2 months ago
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short answer is “through the roof” if you file. the annual and multi-year cap reset. out taxes have more than doubled since 2013

jimyjames.robert96 | 1 year and 2 months ago
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Thank you @cate. This is a little helpful though I can’t see any instances of uncapped taxes on full market value which would approximately be $12k per $1M of market value (so ~ $25k in taxes for a $2M market value home)
@lurker 10 years with the caps of the 6% annual increase and 20% every five years sounds like they would have doubled anyways, no?

xuytbjicwnofjdde | 1 year and 2 months ago
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I am working on figuring this tax situation out, as I too have been very confused.. This notion of taxing at market value also seems hard to fathom, as the math comes out to taxes almost double any other property around me (and I’ve spot checked many, many properties). The other thing is you may have to lawyer up to appeal taxes. Much to my surprise, this actually worked in my old condo building. The Board hired lawyers to challenge our taxes, and it did take a few years, but they successfully got them lowered by like 25%, and we even got some refund for the year prior to the reduction. So it’s not a pipe-dream – it can be done!

cate | 1 year and 2 months ago
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FWIW, many townhouses in Brooklyn Heights and Park Slope pay taxes of $20,000 a year and up.

oliver_nyc | 1 year and 2 months ago
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FWIW our house had a CofO change shortly before we bought it and the removal of the cap on assessments resulted in a jump in the assessed value pretty much equal to the amount on the cost affidavit filed with the DOB for the renovation work. since then its been increasing by the permitted 6% p.a. one thing to note related to the above comments on general tax reform, is that you should probably keep an eye on the “market value” the DOF assigns to your property. while this value doesn’t currently directly impact your taxes (which will likely be based on a lower amount that has been subject to capped increases) i do feel that ultimately any reform will involve the DOF looking at this “market value” more closely. because of whatever algorithm/ formula the DOF uses to arrive at the market value, there are many instances where their estimated value for homes is completely out of sync with the actual market (i’m quite certain my DOF market value is about 2x what i could actually get for my home in today’s market.) if the proposed reform to “equalize” property taxes does move to ward use of actual market values, the DOF will hopefully undertake a fair and analytically robust process to re-asses townhouses. the likelihood of that happening is higher in my mind if homewners become aware of what fantastical amount the DOF thinks their home is worth ahead of any reforms

jrs84o | 1 year and 2 months ago
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In my hood a gut renovation of a 3,000 sq/ft two family will result in an accessed market value of $1.75 million …. No matter how little or how much you renovate.
Two properties (of perhaps four) on my block were gut renovated last year and were “caught” without permits, causing over a years delay in the Reno and Move in Date for at least one neighbor…
Both properties are now in the publicly available Finance (Tax) Logs at $1.75MM… but as far as I can tell the ad-velorum rate remains the same… and at least for the first year they have not been dinged with a higher NOMINAL tax payment.
Gradually over the last 10 years (when props were still being valued under $1MM) and accelerating recently, neighbors simply try and get away with the renovation WITHOUT involving the DOB and DOF.
But that brings up INSURANCE problems when you have a $1.75MM property still on the books for $900K, or possibly TAX problems when you go to sell at $1.75MM and can not prove you built in $800K worth of capital improvements.
The whole thing is a mess if NOT thought through with experts.

chemosphere | 1 year and 2 months ago
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Average property tax in the US is 1.1%, at that rate Brooklyn Heights/Park Slope brownstones worth $4-10m would have taxes of $40k-100k a year. There are many paying $4000 a year. The system is deeply broken.

RobertGMarvin
in General Discussion 1 year and 2 months ago
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Taxes like that would force long-term brownstone owners like m out of our homes.

chemosphere | 1 year and 2 months ago
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Fear not, it’s a political impossibility. The problem was allowed to go on too long and now it’s too late to change it substantially.
Anyhow Bob, if you didn’t live in Lefferts Manor, you could create a rental apartment in your house that would give you income to offset the cost of higher taxes. 🙂

RobertGMarvin
in General Discussion 1 year and 2 months ago
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BUT I do live in Lefferts Manor and, as president of the Lefferts Manor Assoc. I can hardly create an illegal apartment. I’ll rely on the political impossibility 🙂

colonialrevival | 1 year and 2 months ago
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With regard to NYC single family property tax %’s — I don’t think it’s possible to look at the situation as “lost” revenue. Had NYC single family tax kept pace with average USA property tax, properties would not be anywhere near the values we see today. It’s important to understand this when calling it a “political impossibility”. It would be helpful to have a model that accounts for combined mortgage + tax prices as a measure of purchasing power in the 5 boroughs over the past century to get a _real understanding_ of what historical adjustments might have made to tax revenue.. My hunch is that we might be generating _more_ in the current system than we would’ve had tax % been pegged at national average.

chemosphere | 1 year and 2 months ago
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Here’s a $16m house with $20k in taxes. 0.1% or 1/10th the national average. Who does this benefit exactly? https://www.zillow.com/homedetails/842-Carroll-St-Brooklyn-NY-11215/30587047_zpid/

Augustiner | 1 year and 2 months ago
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Lots of confusing info here.
That’s what happens with a taxation system that is neither transparent nor fair.
Here is what I know:
An alt-2 or alt-1 Reno will mean that the cost of Reno is added to the assessed value bypassing the 6% cap. It counts as a 1:1 increase in value.
The deadly cap removal with taxation at market value happens only with a change in Tax class occurs as a result.
E.g. you make a class 2 multifamily or a SRO or church into a class 1 , or a class one into a class 2.

cate | 1 year and 2 months ago
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The house on the market asking $16 million hasn’t changed hands (except between relatives for $0) since 1978. The only renovation permit I see is for “minor roof work” in 2010. Anyone can ask whatever they want in a sales listing, it doesn’t mean that’s what the property is “worth” or that they’ll get it it. The DOF looks at closed sales prices and comps. The NYC cap benefits owner occupants and allows them to stay in their homes by raising taxes gradually over time. This helps create stable, thriving neighborhoods.

colonialrevival | 1 year and 2 months ago
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Yes — just because a property is listed for sale at an insane price does not mean it is worth that much. The $/sqft of the listing shared is nearly double what comparable homes on the same or neighboring streets have sold for.

chemosphere | 1 year and 2 months ago
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oh come now people. Here’s one that sold for $12m with taxes of $23k, does that satisfy you?
Who are these owner occupants we are designing our state’s fiscal policy to benefit? Would you like me to show you a listing of another owner occupant, who owns a house in Carnasie or Brownsville, that is worth a fraction of the amount of these mansions, paying more than 1.1% in taxes?
Do you think the NAACP is opposed to helping “owner occupants”?
https://www.nytimes.com/2020/02/24/nyregion/property-tax-reform-nyc.html
https://www.zillow.com/homedetails/17-Prospect-Park-W-Brooklyn-NY-11215/30586956_zpid/

randolph | 1 year and 2 months ago
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the way California does property taxes seems more fair to me – i could be wrong but I believe your taxes are 1% (maybe closer to .75% in certain counties?) of the purchase price and the yearly increase is capped at 2%. this would both satisfy an owner like Bob who has been in their home for close to century and would properly recalibrate the tax when the property changes hands. this might result in lower property values across the board but how is that a bad thing – making it easier for more people to become a homeowner whereas now you need such a massive amount of cash just to get in the door.