Assessment Limitation

I am looking at buying a two family in Brooklyn and have a question on how much the property taxes could be.  In looking at the NYC Finance website it looks like tax bill is based on “Assessed Value” which is determined by taking the “market value and multiplying by 6%. More importantly seems to say “Assessed Value (AV) cannot increase more than 6 percent each year or more than 20 percent in five years.”  Are there are exceptions to this rule?  For example sale of the property or renovation.  The property has a very low market value based on information on the Department of Finance website but it was renovated before sale so I am paying more than this. I emailed the Department of finance and they said **”alteration or new construction”** are limits to the Assessment Limitation. How do you determine if a gut renovation falls in this exception?

mberglaw

in Taxes 12 years and 11 months ago

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carroll2stones | 12 years and 11 months ago

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There is an exception and it can go up based upon the cost of the renovation.  They basically take the 6% and multiply it by the cost of renovation that the architect reported to the DOB.  It is not subject to the yearly or 5 year cap and is on top of it.  It can cause the taxes to go up significantly.  If the seller already did the work, it should have already been included in the taxes unless the renovations are very new.  You can look on the department of buildings website and see if they had a permit for the job and look at the cost affidavit.

slopegirl | 12 years and 11 months ago

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yes I believe they can bump up after a renovation. there was an article in the times about house taxes going way up after renovations but as I recall all of their examples were multi-family buildings (ie over 4 units). A real estate attorney might know for a two family what is more likely or reasonable.