City Still Raking It In From Real Estate Taxes
The city’s Independent Budget Office released a report yesterday revealing what a boon the real estate tax structure has been and allayed any fears that a modest market correction would have any serious impact on revenues. The percentage of homes that sold for over $500,000 (the trigger point for higher tax rates) increased to 33…
The city’s Independent Budget Office released a report yesterday revealing what a boon the real estate tax structure has been and allayed any fears that a modest market correction would have any serious impact on revenues. The percentage of homes that sold for over $500,000 (the trigger point for higher tax rates) increased to 33 percent from only 10 percent in 2000. “Barring an unprecedented fall in property values, this increase in the share of transactions subject to the higher rates is unlikely to be fully reversed,” the report said. “Thus, at least some of the recent tax revenue growth is probably locked in thanks to this bracket creep.” The report also said that despite rising rates, there has been little hard evidence of a market slowdown this year.
Real Estate Revenues Keep Rising [NY Times]
Referring to the NYT article from last Sunday, I wonder what would happen if all those $10 mm plus pre-war apartments were taxed equitably with 1 – 3 family houses? Probably a lot more money in the tax coffers.
NYC r/e taxes are low compared to many suburbs, and especially when compared to areas like Brooklyn Heights, Park Slope, or Cobble Hill where houses priced in the multi-million are common. Look at the house on Willow Street (http://www.corcoran.com/property/listing.aspx?Region=NYC&ListingID=823847) The taxes on that house were $10,450. That is 60% less than the taxes on my UWS Manhattan brownstone and I doubt my house is worth anything more. Maybe there ought to be some tax equalization in that sector, too….I know that is sacrilege on a site which focuses on Brooklyn, but a free ride is a free ride.
Linus,
Well I’m just a homeowner who gets the bill. Mine’s doubled… in fact maybe more. So I hope you’re right and will investigate if there are any caps for 1 – 3 families. But from talking to neighbors and watching the r.e. listing taxes in Victorian Flatbush, that’s what’s happened in the last four years – doubling.
I think the city would be a better place if the transfer tax was 6% and real estate brokers took the 1%. And money would go directly to the local schools (thus increasing property values as well as improving schools).
Seamus,
I don’t get it. RE tax increases in NYC are capped, to prevent exactly that kind of precipitous increase. Even the one-time property tax increase a couple years back was, what, 18 percent? Somebody correct me if I’m wrong but isn’t the limit on tax increases for a 1 to 3 family something like 8 percent in a year and 20 percent over 5 years? (I’m sure I’ve gotten at least part of those numbers wrong, but I think it’s something like that.) So I’m not sure how your taxes legally could have doubled in four years, unless you had your C of O changed, or moved, or something like that. Can you explain?
Eh. Real estate taxes are still so low in NYC. It’s tought to complain about that one. And these days since you allowed to take your 500k/couple cap gains without paying any taxes at all, it’s tough for me to complain about the transfer taxes. Real estate, esp in NYC, is one of the lowest taxed games in town.
Perhaps your RE tax has doubled/tripled in 6 years – but mine haven’t gone quite that much.
RE taxes elsewhere have also escalated greatly – that I guarantee.
I have a condo upstate and seen the major rise there- not in any great school district either- and taxes on that are slightly less than my 4family here – although its value is 1/5 of here.
Don’t forget the “Fuck You For Having A Little Money” mansion tax of 1% on purchases over $1,000,000.
Yup, NYC is the only place where they take your money when you sell (Transfer Tax, 1%) and when you buy (Mortgage Tax, 1.75% to 2.5%) real estate. Just imagine the value of real estate transactions in the last few years…
What I’m utterly amazed at is that there has been no homeowner uprising over their property taxes doubling and tripling in the last 6 years. My taxes have more than doubled in the past four. The schools are still terrible compared to the burbs, and certainly haven’t gotten twice as good in the same time period. Nor have any other NYC services improved that I’ve noticed. So why do we sit still as property taxes, possibly based on a bubble, drive older and less well off homeowners out of their homes. The increased paper value does nothing for them unless they sell. Look what is happening on Long Island. People are just selling and moving because they can’t afford the never ending property tax increases.
Part of the historical equation of buying a home in NYC is that your property taxes will be relatively low – compared to the burbs – because 1) the huge number of tax paying housing units and, 2) the schools and services are nowhere near as good – so low taxes. That math is evaporating quickly.
If we don’t start screaming, we’ll be paying Montclair or Greenwich tax rates, and still want to send our kids to private schools.