Update for all homeowners in New York City. If your property taxes are low they are probably ...

going up. (See https://app.tidalforce.org/newtax to estimate what your new property would be under the new proposal.) Yes, the new New York Property Tax Advisory Commission December 2021 Final Report is proposing that your property tax should be based on your market value with no assessment caps per year. There are a few exemptions planned for owner occupied homes and also the Senior and Veteran exemptions along with others are planned to remain. So, your exact tax will vary. To check any property tax by searching by name of owner or address see https://app.tidalforce.org/propertytaxsearch But the truth is if you live in Park Slope Brooklyn or Bed Stuy or other places where the annual property tax is around $5K to $8K or less and your home's market value is in the $1 Million or above, your property tax bill will go up. The plan is to phase this in over 5 years.

But what about Staten Island and Bayridge Brooklyn

Staten Island and Bayridge and parts of Queens will have their high property tax bills go down.

Update for millionaires in and thinking of moving to New York City

New York City is considering circuit breakers in the Property Tax Law and listen to our Vicki Been ask the question of whether millionaires should qualify for the circuit breakers. What is a circuit breaker? I suppose circuit breakers need some description nowadays, since they have become rare and shy of the Common People, as they call us. They are (or were) a means-tested exemption, fairer than the current system where older properties get all the exemptions and limits and the newer properties and rentals and commercial pay all the tax (excluding 421A exemptions, of course). See Should Millionaires be included in the New York City property tax circuit breaker?

Update for people looking for examples of the new proposal in New York City property tax

As far as we see, there are no examples. Please Tweet to Mr. Cappelli our Staten Island kind representative to ask for examples

Update for people thinking of moving to New York City

New York City is considering reassessing all small homes to their full market value. This could drastically change property tax in NYC. Because of assessment change limits, every property in New York City is a special case. The limits have been in place since 1981 and they protect older properties. Assessment increase changes are limited to 20% over any five year period but this excludes improvements and new construction. There are anomalies here also where developers put renovations on the demolition line in the Department of Buildings Cost Affidavit to avoid assessment increases. The entire process is very opaque.

But one interesting thing in NYC is you can buy the low assessment in an transaction. In California, the property will be re-assessed to market value on sale. But that is not the case currently in NYC. Of course, the Property Tax Advisory commission is proposing full assessment at market value all the time and that would remove the caps, but this proposal is not a law and it remains to be seen when the small homeowners will revolt against such a large change.

Update Property Tax Advisory Commission (Brooklyn 2021 Hearing)

The commission has proposed full assessment for all properties in New York City. This would phase in over five years. Although, there have been no examples, this could mean if you pay $5000 a year now, 5 years from now you could be paying $30,000. See https://tony.brooklyncoop.org/what-will-new-york-city-property-tax-be-in-2021-ask-the-commission

TO CONDO OR NOT?

You are asking yourself should I buy a condominium in New York City? Well, you should know that New York City property tax is mostly affected by the 1981 Tax Law called S7000A. See https://en.wikipedia.org/wiki/S7000A . That law created four classes of properties. Condominiums did not exist in large numbers in 1981. In fact, parties that were involved in the creation of S7000A actually reported that the law did not consider condominiums and cooperative apartments since there were so few of them and simply made a mistake in the law with regard to condominiums and cooperative apartments.

THE END RESULT

The end result is property tax in New York City depends on the properties class and it's history. Cooperative apartments and Condominiums without the full 421A Exemption usually pays more, around $10,000 or more per year and usually more than a one to three family home, which usually pays less that $8000 per year.

GO TO THE MAP

The only way to see the differences in property tax is to look at a map that shows the assessed value divided by the market value. The assessed value is the value that the property is taxed on. The growth of the assessed value is also limited by the S7000A law. See https://app.tidalforce.org/ and search for any property and then look at the map that shows the assessment ratio and rates the closeness to the assessment limit.

MAPS See Tax Rating Map

ANSWER

New York City Property tax is high for condominiums and cooperative apartments that do not have the full 421A exemption when compared to one to three family homes.

TO QUOTE NYC FINANCE

"The N.Y. State Law mandates that we value all Class 2 properties as income producing, based on their income and expenses. This means that when you see the Market Value that we assign to your property, it may not look like what you would expect its sales price to be. To get to your Market Value, we use a statistical model as a tool to find typical income and expenses for properties similar to yours (in terms of size, location, number of units and age). Next, we apply a formula to the income data to get to your Market Value. Class 2 properties include rental buildings, condominiums and cooperatives. All are valued as if they are income producing properties. There are variations in how we determine your Market Value depending on whether you live in a larger condo or co-op with 11 units or more, or a smaller building with 10 units or fewer. "

IN PLAIN WORDS

This means that condominiums and cooperative apartments market value DOES NOT mean the common definition of "market value" "All are valued as if they are income producing properties." even if you live in your condo and you have no income, NYC Finance will compare against some similar property and come up with an income. "Residential property with more than 3 units including cooperatives and condominiums. NY State Law mandates that we value all class 2 properties as income producing, based on their income and expenses. We use a statistical model as a tool to find typical income and expenses for similar properties to yours (in terms of size, location, number of units and age). Then we apply a formula to the income data to get to your Market Value. The law requires that we value co-ops and condos as if they were a rental buildings, even though they are not income producing." You can see that the direct formula is not given. The NYC Finance uses "a statistic model" and "apply a formula"

CONCLUSION

At this time the best deal in New York City is two or three family homes. They get the best treatment with respect to property tax and can be used to earn extra income but as with most things, you have to be careful. Look at the maps and find properties that have a low assessment and subscribe to a free newsletter and ask questions.

Related Topics

Please realize that your tax dollars are going for many things such as campaign financing. See public taxpayer dollars in the NYC Mayor's Race