Taxes on Four-family

My house is a legal four family. The taxes are double what other people on the block who have legal 1-3 families pay. (and the houses are otherwise identical) I only use the house as a 3-family. Would there be some way to convert it to a 3 for tax purposes? I know this would trigger additional taxes due to renovations, but maybe you would come out ahead?

xchx

in Roofers 10 years and 8 months ago

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xchx | 10 years and 8 months ago

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Thank you Resident2\. We haven’t made any real improvements to the house (though how would they know what it used to be like?) I’ll report back what happens for the record.

resident2 | 10 years and 8 months ago

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No they cannot raise the taxes based on a sale price. But that said they can raise it based on “improvements” even if there were no permits filed to trigger the re-assessment based on the “improvements”. Without knowing if you have a $250,000 designer kitchen with central air throughout and all new designer bathrooms etc. And also the current taxes and numbers you are talking about, it is difficult to say. It is better to get the assessments changed before you make it look like you have just spent a few hundred thousand fixing it up. Like so many of these City inspections it can be rather arbitrary, what one inspector thinks can be very different than what another thinks. From my prior experience, I have always won my cases when it has been done before I have renovated the house and it has always come in that the “market value” has not changed, even though I had only bought it a few months prior (for vastly more than the DOF market value) and they can see the public record (if they wanted to), although I never bought it to their attention what I paid for it. Only the tax class changed, and the taxes went down, based on the new tax class. This is why a lot of old timers did not make repairs to the outside of their houses, not only because it perhaps bought attention to the fact that they had some money, but the City would hike the taxes based on the improvement.

xchx | 10 years and 8 months ago

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I just talked with someone at the Tax Commission, and they said they would probably use the price I paid for the house 2 years ago to determine the “Market Value” if I convert to Class 1\. That would be weird, because everyone else on the block has far lower “Market Values.” If that happened, my taxes would actually go up. Resident2, you think there’s no chance of that?

resident2 | 10 years and 8 months ago

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Market Values, Assessed Value or any other value that any City Bureaucracy puts on your house has absolutely nothing to do with what you could sell it for. Do not worry about that. Just put in for a change of class. And be sure that there is no extra kitchen somewhere….. The inspector will need to look inside every apartment.

xchx | 10 years and 8 months ago

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Another thing – the other Class 1 houses on the block have “effective market values” that are about half their “market values”… I figure that’s due to the limited increases ever year. If I get mine reclassified, my effective market value and my market value would be the same right? I’m going to see about the seminars. thanks again for the useful info.

xchx | 10 years and 8 months ago

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I just checked out the rest of the block and my market value is lower than others. (Taxes still 2x because mine is Tax Class 2A and others are Class 1.) If they do re-classify my house as Class 1 because it’s used as a three-family, how will they assign a new market value?

xchx | 10 years and 8 months ago

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Thanks a lot guys. My “market value” is listed at only $200,000 when the house is worth like 5x that. Could this still work?

no-permits | 10 years and 8 months ago

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i have appealed at two buildings. at one building, my taxes went down about 25% – which is still higher than other buildings with the same use on the block. at the other building, my taxes did not change. that one is still double what others are on the block. i never had a chance to go to a hearing. i never got a chance for a hearing.

Arkady | 10 years and 8 months ago

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Also go to the seminar they’ll give on how to appeal – the people are very helpful & elucidate a lot of the arcana. You’ll have to fill out other forms TC 101, etc. so download the relevant ones before the seminar so you can get help w/ those too.

resident2 | 10 years and 8 months ago

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Strangely no, you do not need to legally change the use through the DOB to get the Real Estate tax classification changed. The department of finance, just this week sent out all the “Notice of Property Value” forms, as an owner it came addressed to you, the property owner. It is a very confusing document, just like most pieces of information sent out by official channels. You have the right, during this next 30 days to lodge a challenge to your assessment for the coming tax year June to June 15/16. Download the forms from their web site the change the tax class. State in your challenge that it is being used as a three family house, you want to be taxed as similar three family houses on your block. Do the home work to come up with three family houses of similar size, condition etc on your block. File it on time, they will then schedule an appointment for someone from the tax assessors office to come to see how the property is actually being used. If they see that it is being used as three family, you will get the tax class changed. If you are sent an appointment for a hearing, go with all of the data to support your claim and have a number in mind that you think should be fare based on the taxes of your neighbors. It is like lets make a deal, if you give them the data, you do your home work it can get done. Do not hire an attorney to do this. When you go for your appointment you will see the attorneys there with all their files of cases. The adjudicator basically says OK put them in two plies, this pile is approved, that pile try again next year. I know it seems strange, but I have been there, done this…. The bottom line is the Real Estate tax department, taxes based on use, not legal use. Which is why you often see buildings listed as one thing, but the buildings department records show something else.