S#!t Outta Luck: Values Down, Taxes Up
We’ve heard what Elliman, Corcoran and others think happened to prices last year and now we know what Bloomberg et al think: That property values—at least in Clinton Hill—fell 10 percent last year. The assessed value, however, did not decrease in accordance. As previously reported, property taxes are going up 7 percent this year. Ouch….
We’ve heard what Elliman, Corcoran and others think happened to prices last year and now we know what Bloomberg et al think: That property values—at least in Clinton Hill—fell 10 percent last year. The assessed value, however, did not decrease in accordance. As previously reported, property taxes are going up 7 percent this year. Ouch. Update: Crazy Stable is riffing on the same topic.
It’s interesting that I haven’t seen anyone chime in to support my call for taxes being based on market prices!! I suppose I shouldn’t be surprised.
Why would we want to have good schools and roads and public transportation…. instead we can buy $2 million houses and still only pay $2400 in taxes.
Ridiculous.
if any of you has a bunch of time on their hands and wants a better grasp of what’s going on with the city’s prop tax, the IBO put out a great report that is dead on with describing how it works, why it works & why it doesn’t.
http://www.ibo.nyc.ny.us/iboreports/propertytax120506.pdf
(really interesting table on the bottom of page 19 shows the effective tax rates for various property types in the City).
the problem with trying to fix the system is it would require a number of class 1 (1-3 family homes) and some coop/condos to pay much higher rates than they have been paying, which really would not be feasible. So really, it would most likely cost the City a lot of money to implement. it’s basically a mess.
ProfRobert,
We’re in roughly the same boat as you. South Slope, with about a 45% increase in market, but well under recent appraisals, and only a nominal increase in assessed value, rpesumably due to statutory caps. My concern is that the big increase in market value sets a long-term course of perpetual, albeit incremental, increases in the assessed value. The limit is 6%/yr, 20% over 5, but this could go on pretty indefinitely. So my query is the same as yours.
As for your 3-1 quety, I don’t knwo if that affects the market valuation, but you would not be switching tax classes. Same rate to get to the assessed value.
ProfRobert — I think it’s relatively rare that one can gain by contesting one’s property tax, though I’ve done it. It requires a fairly lengthy period of falling values, so that you can submit evidence of comparable sales producing a lower market value than the one the city assigns and that the lower market value results in a lower assessed value (as I’ve explained above). You probably have no basis for complaint since, even though your market value went up 26%, your assessed value, on which taxes are based went up at most 6%. But you’d have to do your own arithmetic.
I read David Lewis’s 10:53 post after my 10:54 post. I went back to check, and the assessed value went up by 5.995%, so I guess it’s pointless to complain.
But let me ask another question: My C of O makes my house a legal three-family (and DoF thinks there are three units here). In fact, it’s just me and my family, and I have no plans to reconvert the space into multiple units. Does it make sense for me to change the C of O? Would I get a better tax break? I assume this being a legal three-family would be more valuable for resale purposes, of course, should I decide to move somewhere down the line. Thanks again!
so in other locations, are the city assessments dead-on? i’m annoyed because my assessments went up, inching ever-closer to what i actually paid for the place. what else do we have if we don’t feel like we’re getting over on the taxman?
And yes, taxes on class 1 residential property in New York are really, really low. Compare the taxes on the property above to those on a house of that value in any of our suburbs. (E.g., I pay about $2000 on a house valued at about $700,000 in Brooklyn; I pay about $4500 on a house valued at $300,000 upstate. City dwellers have no reason to complain.)
Strangely, my market value went up this year by 26%. The value assigned is still (and always has been) well below my purchase price.
I’d welcome anyone’s thoughts on whether to appeal the market value: On the one hand, I can’t believe property values in South Park Slope have gone up 26%, but on the other, I don’t want to look a gift horse in the mouth and have DoF tax me based on what I paid for the house in 2007. Thanks for any guidance!
“Everyone’s taxes went up, and now the assessed values are going down, while taxes are still increasing year-to-year. WTF?”
I have in the past appealed my market value estimate, but, as I understand it, there are times when even a falling market value may still result in increased taxes. Assessed value is supposed to be a percentage (about 6%) of market value. On the million+ house above, this would be $60,000+. But note that the assessed value on the house above, even increased this year, is substantially less than this. This is because, even when market values go leaping up, the yearly increase in assessed value is capped at 6%, and it may be considerably lower than the assessed value that the house would have, if computed without regard to the historical values. Thus, in the house above, the assessed value was not increased to $60,000+, but was only given a 6% increase to 45,652 (note that the increase, $2584 was 6% of the prior assessed value, $43,068). Anyway, the owner of this house has no complaint, since he or she is paying taxes as if the market value of the house were about $750,000, not a million. When the market value falls below that, there’s reason for adjustment.