Tax implications of **wildly inaccurate Alt2 reno estimate?

Hi All – I know there are some very detailed and lively discussions about tax implications of Alt1 and Alt 2 permits. I have a very specific question that I’m not seeing answered yet. Our architect went in a with a really lowball reno estimate for an alt2 filing. The DOB came back and quadrupled it, to a point well over what that part of the reno will actually cost. Our architect says they only do that for the filing fees, it would be cheaper to just pay the fees than fight it and **it will have no impact on our tax assessment** because the DOB is completely separate from however they do the assessment.

Based on what I’ve read here, I don’t think that’s true. So, the question is, does the actual DOB renovation estimate on your filing directly impact or your tax assessment? Or does an Alt2 just open you up to reassessment regardless, and the DOB estimated cost doesn’t matter? Is it worth fighting this with the DOB and has anybody ever won? Thank you!

Guest User | 5 years and 9 months ago

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sixyearsandcounting | 5 years and 9 months ago

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Urbandad that’s what I figured – of course, the system is counterproductive in that it incentivizes doing work without permits.

hkapstein | 5 years and 9 months ago

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@sixyearsandcounting Any sort of permit pulling is going to increase your taxes. There might technically be some exceptions, but they won’t apply here.

sixyearsandcounting | 5 years and 9 months ago

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Slightly off-topic – anyone have an idea of the tax implications of converting a 2-family to a single-family?

MDR | 5 years and 9 months ago

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ps158- when your taxes went up did they indicate that it was because of the renovation? Just wondering because I think everyone’s taxes have gone up.

Guest User | 5 years and 9 months ago

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My understanding is that once you’re reassessed (which may take a few years), your property tax assessed value will eventually go up the amount on the PW3. This change is not subject to the cap on annual increases. This means that your annual property tax will go up by about 1.5% of the amount on the form (~25% of 6%).

For what it’s worth, when I had a property tax question on my Alt-1 renovation I called the office of Anthony Como Associates (nyrets.com) and got a very helpful answer. I haven’t been reassessed yet, so I don’t know if the answer was right, but they certainly sounded definitive.

hkapstein | 5 years and 9 months ago

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I think you will file another PW3 to state the actual cost of work at the end, but if that were significantly lower than the initial, and the difference was not explained by PAAs, I’d be concerned, and I don’t know what would happen. You could request an appointment with a commissioner if you think something was done incorrectly. I would say, yes, I’d expect the permit cost to be picked up by DOF.

ps158 | 5 years and 9 months ago

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My memory is a bit hazy, but from my personal experience – yes, the cost of the reno will somehow make its way over to DOF, and your taxes will increase based on that #. For us, it didn’t happen until the second year-ish after we completed the reno / moved in. And boy did our taxes skyrocket…Maybe someone here could confirm though that that is indeed how DOF knows to adjust your taxes…