New York City property taxes, long considered inequitable, could face a big overhaul under a plan from a mayoral commission.
Comments: 126
Non-resident and corporate residential property owners who have second (third, fourth?) homes here are artificially inflating housing costs. It's time for them to help rectify that situation. They should have an annual property tax equal to 100% of the appraised value of their property that goes directly into a fund for affordable housing. Some of the owners (and real estate agents) will be shocked and appalled and may sell: that's great, that process will help make housing more affordable for residents, the people who make this city great. And who knows, it may cause a few people who don't reside in NYC for tax reasons to move back for tax reasons.
Property values in Brooklyn have skyrocketed while property taxes have not, compared to Manhattan. A similarly valued brownstone in the Village will pay 5 times more tax than a house in Brooklyn Heights or Cobble Hill. Property tax should be based on what your house would sell for if you sold it, with some kinds of exceptions for low income homeowners whose homes are their sole asset. If your neighbor is a zillionaire renovator, it shouldn’t affect your taxes, only his.
Do you own a house in Brooklyn? My property tax has tripled over 20 years.
My income hasn't -- quite the contrary.
My relatively very insignificant house is taxed based on the value of other houses in neighboring areas. Those houses do fetch a lot. Mine, for several reasons having nothing to do with how much money and personal sweat I've spent in maintaining it, never will.
@B. If you believe the City overestimated the value of your house, can't you appeal that valuation?
@Eliza Hays Please show me a brownstone in the Village that is similarly valued to a brownstone in Cobble Hill
The issue is the ever present one of Owners In Gentrifying Neighborhoods. The article focuses on the tax advantages afforded the wealthy new arrivals, but ignores the challenges to the pioneer owners of modest means of current and future tax increases. Cities and states across the nation have put in place protections for these owners based on age, length of tenancy, and the like. New York City, and the state as well, should do the same. Otherwise we're turning our cops, teachers, and firefighters, the middle class that makes the city work, out of their homes.
@Mark . The article is short on specifics, but the proposed changes do include a income- dependent cap on real estate taxes based on the declared income of those owners who actually reside in New York City. Also, I know very few cops or teachers who own a multimillion townhouse in the Slope.
But when well-heeled neighbors buy houses next door and down the block, at higher prices than one paid 20-30 years ago (or, in the case of many people I know, 50-60 years ago), one's own property tax rises.
@Pete in Downtown Well go to Bed Stuy or Clinton Hill and you will find middle class people still owning homes. And byw, most of us who have lived and owned in Brownstone Brooklyn for decades and generations were never grateful to see our communities destroyed via gentrification. This plan will simply finish driving the rest of us out so the rich can take over our cherished homes (yes these are our homes not investments!)
NYC and state need to rather focus on finding ways to manage their sky high tax revenues better and deliver better services from transit to sanitation and infrastructure before they look for more money.
@Hisham Oumlil The whole idea with this plan is not to raise more money but to raise the same money more equitably.
@Sk When have politicians not taken the opportunity to make taxes equitable and get more tax money at the same time. When they make a tax to "raise money" for a cause do they ever retire that tax?
These recommended changes to our real estate tax structure make sense, and will therefore not happen. After all, this is New York! A more just and equitable tax system - not with this governor, not with this mayor.
Park Slope residents loves progressivism and progressive tax policy until it affects them personally.
Go ahead and change it.. Rents in market value brownstone buildings will only escalate as these taxes get passed on. The article cites Park Slope, but values have skyrocketed in Bed-Stuy, Bushwick, and Clinton Hill, among others. Hard to imagine saddling the "real New Yorkers" according to Brooklyn Boro Pres. Eric Adams with a stiff increase in their property taxes. Lower tax areas of the Bronx will probably see gentrification accelerate as buyers see the low-tax incentives there.
Maybe De Blasio and City Council should try something novel and try cutting property taxes...
@c - Fat chance. The Mayor and City Council are addicted to spending other people's money. When DeBlasio took over the City funded portion of the budget was $52 billion and the headcount was 260k, now the City funded budget is $70 billion with a headcount of 282k. Do the math, the money has to come from somewhere...
Over the course of twenty years, our Flatbush property taxes have almost tripled. Our house taxes are based, unfairly, on the huge detached Queen Annes to the north and east of us, with their lawns and large garages, worth 3-4 times what we might get for ours.
I'd like to be carried feet-first out of our home when the time comes. That will be predicated on whether we can continue to pay property taxes that do not reflect the value of our house, crime upticks in Flatbush (I do not think I can stand a reprise of those 30 years of Brooklyn squalor I already lived through), and whether the religious right will make it even more difficult for me to give myself a dignified death on my terms.
The reformers should research Coase's theorem. If there was an "unfair" advantage in the form of lower property taxes on a house, it would sell for higher on the open market because that advantage would be priced in. the only person that benefited from the high advantage is the owner that got a sudden windfall in value when the tax law was first passed.
implementing this reform just penalizes newer buyers of expensive homes by taking away a benefit they bargained for by paying a higher price and then gives a windfall to homeowners seeking to decrease their own tax bills. This reform will also arbitrarily impact rental rates across neighborhoods.
@David . Why should the many owners of apartments subsidize the house value of affluent home buyers who were
banking on an artificially low real estate tax when they bought their house? Because that is what's currently happening!
@Pete in Downtown This proposal does nothing to reduce taxes paid by apartment owners -- their taxes will increase also under this proposal.
The SALT elimination bites hard enough already. Implement this proposed tax change and there will be unintended consequence and lower tax receipts as property values fall and high income taxpayers leave NYC.
From the tone of many of these responses, I sense most of them are renters who would not be affected. I live in Brooklyn and have a brownstone, not in Park Slope. The problem with this argument and for many of those who comment is, that most New Yorkers are renters. You do see that these tax increases will just be passed onto you, and for those who are rent controlled, your buildings will just fall into disrepair because the owners can no longer afford upkeep. Be careful what you wish for. Not every property owner is a billionaire. I agree that I am willing to pay exorbitant personal tax rates to have reasonable property tax rates, and there are plenty of us who have large mortgages to pay, and would find ourselves unable to afford our homes anymore. Property values would fall. Lower value and lower tax collection.
@Mark
Valid points, but if the conclusion is that property values fall, doesn’t that mean the tax will come down too?
Put another way, for the “middle market”, could it be a mark down on the value and neutral on the tax?
Which means that if someone is not over levered, they’d be fine.
My landlord is a fraud, and I would love to see him pay full-value on his $1.7M brownstone rather than the $9k/year for his $110,000 assessed value. He lives in Bali, the building is in disrepair, and he has told all of his tenants not to contact him because it "reduces his quality of life."
I am sorry for all of the honest homeowners who will be negatively affected by this change, but it's people like my terrible landlord that are probably the reason.
Sounds like you should move out or you just paying really cheap to put up with him.
If this property tax reform were implemented, I can foresee a rash of burning brownstones in the city: "Mayor's 2 homes mysteriously burn to the ground, reducing the entire blocks of attached brownstones to ash, forcing the bankruptcy of all the insurance companies in New York. Government officials are perplexed."
Deblasio And Johnson would love this change because it plays into developers hands. I live near Park slope My taxes have already gone up significantly in the last number of years. Any big increase to come is essentially the end of my current 2 renters in a 3 family. The cost will force a move to market rate which neither can afford even though they have pretty good jobs, I'm happy to keep their rent low for as long as I can.
The tax code has been used to gentrify and outright steal land from people throughout the country(Hawaii being the worst). This plan cites raising taxes in with fast rising prices, this can only put to large a financial burden on longtime residents forcing sales. This is exactly what the Mayor and the city council want to see happen. What's good for real estate corp is good for politicians pockets.
The appraised value of a property is not relevant until it has been sold.
Yes, I get cold calls offering to pay ridiculous amounts for my apartment, but it is my home. I just want to keep living here as I have for years.
Some of us have lived in coops for decades; the appraised value has skyrocketed due to foreign investors or others taking apartments in the neighborhoods, but our own incomes have not gone up.
Already property taxes on our building have gone up 300% in recent years.
There should be higher taxes on second homes and investors, but full-time long-term residents should not be priced out of their homes by skyrocketing taxes based on the concept of market value.
@Lynn Appraised value is also relevant for taking out loans against the value of the home, i.e. you don't have to sell to benefit.
Loans require payments with interest. It is not a good thing for retirees to take out loans against their houses. That's how people loses their homes.
Lose their homes.
(Who am I, Eric Adams, with no sense of subject-verb agreement?)
Artificially low taxes account for a portion of the enormous rise in residential real estate prices and rent. How mush I'll have to leave to the experts. But when the City cries that it doesn't get its fair share of education funding, it has to look at where that comes from. Property tax.
The federal SALT elimination is however,the elephant in the room. It cannot be changed except by electing a new President and Congressmen willing to attack the Trump tax changes. It punishes New York and other higher cost states; and a large portion of homeowners in NYC and the NY Metro region. And that was intentional.
@cheryl - The SALT elimination is only for Federal taxes. It means someone earning $500,000 in NY, South Dakota or Florida (as examples) all have the same Federal tax liability. Otherwise one tax payer has his Federal taxable income lowered by the deduction and thus subsidized by the other!
@Donna Gray the economics are much more complicit than that.
@Donna Gray
New York is one of those states which pays more in federal taxes than South Dakota or FL and did so before the elimination of the deduction. SO a close look at who's subsidizing whom may be in order.
Plus that deduction helped make make it possible for working people in this general area to have their own homes. Look at people earning in the $50,000 to $150,000 range, whose average homes have taxes which inevitably - for long time residents - end up far higher than their initial mortgages( Which are still deductible at most levels). For single individuals, especially older single taxpayers, that $10,000 exemption often doesn't cover their tax expenditures, and results with their paying significantly higher federal taxes. And it's in amounts which hurt middle and working class people.
The deduction for property taxes could be phased out in stages related to AGI, eliminating that $500,000 and up group you think is the norm, and/or giving some other relief to help people maintain their homes. Now it simply hurts many working people trying to get by, - and retired people, who want to live in their own homes - who don't get many other breaks.
Do these commissioners realize that the market value of a brownstone doesn't necessarily match the income of the homeowners?
So yes, a property might be worth $2 million, but the homeowners might have bought the house years ago when it wasn't worth as much and the family was earning a modest income.
In the current period, the house is worth $2 million, but the family might be earning a lot less. In fact, the owners might be on a fixed income.
This is going to push homeowners out of their homes and hasten gentrification.
@Barbara
You may wish to read the article again. There are two proposed provisions designed specifically to address the scenario you are describing. From the article: "One, a “partial homestead exemption,” would help people who live in their homes with income below a certain level..." "The second measure, called a “circuit breaker,” would limit tax bills to a certain percentage of household income."
@Barbara
Indeed! I am one of those home-owners. I bought my home decades ago in a price range I could afford. My income has barely gone up at all over the decades since, but my home has gone up in value astronomically. I agree with taxing homes more equitably, but there should definitely be limits on how much taxes should increase for existing owners!
@Barbara You are correct and that's what the real estate developers who OWN most of the City Council want- a city of, buy and for the rich. The rest of us can get out!
The real estate developers and City elite have spent decades trying to make this a city only for the rich. And they are succeeding. According to the NYT a family now needs at least $300,000 just to be considered middle class and it won't buy you a home/condo for a family of 4 which costs millions.
When the Council raises those taxes on brownstones in Bed Stuy, Clinton Hill etc they will finish driving out the last of middle and working classes of all races and ethnicities who formed the backbone of our communities for decades and generations. How will a retired everyday Brooklynite who's owned a brownstone for 40 years or the middle/working class family pay such real estate taxes which are already pushing $12,000 and up? Yeah, the millionaire next door can pay, but his middle/working class neighbor cannot. So what happens? The modest homeowner must sell and go and isn't that what the real estate developers and the elite want? The want our homes. They want our neighborhoods. They want our lives.
If the Council wants to charge those who buy a property at millions those new tax rates feel free, they can pay it. But applying this to those of us who have formed the backbone of our neighborhoods for decades and generations such usurious rates is just another tactic to drive us out and unless we stand up to them we, along with our children and grandchildren will soon be gone!
@RFS
That's exactly what it is. There is no other way to make sense of this. They want us to go one way or another!
@Pike Yes, that's exactly what they want and it's time we stopped them.
@RFS
And that is precisely the point: You have an asset with an unrealized capital gain and the government wants a piece of it. Now you know how the "rich" feel.
Property taxes increase the holding costs of speculators and reduce speculation. Massive exemptions or limits on property taxes, like in California, lead to disaster. Along with homestead and other protections mentioned in this article, this is good policy.
What a horrible idea!
Raising taxes as proposed will make living in NYC for retired people on fixed income impossible. Rental rates will zoom up driving away many young and old people, rental rates in shops will zoom up as well, making owning a small business- a tough task already, impossible.
There will be a mass exodus of people and business out of the city.
Bottom line: using the same tax percentage rate in the real (theoretical ) value of the property will kill NYC .
Yes and then the property values will sink to an affordable level...too late though
While everyone seems to agree that property taxes should be arrived at equitably, it's difficult arriving at a solution that is fair to everyone involved. Affixing the taxes on a fair market value based system leaves people who bought a home years ago, whose wages or retirement income haven't appreciated anywhere near what the real estate market has, at a distinct disadvantage. The potential offsets proposed in the plan based on income are vague and almost certain to be insufficient.
What seems a fairer system, used in California, is based on purchase price with adjustments made for inflation and improvements. People who've been in their homes for years without making major renovations enjoy some stability in their property taxes. People who arrive later and whose purchase price is higher pay and whose income is probably higher pay more in property taxes. Gentrifiers and house flippers who move in and remodel a home also pay more as a result of their modifications. This is a system that, in addition to being fairer all around, also helps maintain the fabric of the neighborhoods by not taxing the long time residents out and removes the economic stress of gentrification and development to the communities.
@Bill Outcault Except that system (believe it was Proposition 8) had disastrous outcomes, ruined education in many Californian communities (literally, no money) and is widely seen as an example of what not to do.
@Pete in Downtown It was Prop 13 in 1978 and it still has 65% of potential voter's support. The disastrous outcomes you refer to were because the state, at the time, was overly reliant on property taxes to pay for everything. After the dust settled from the proposition's initial passage and the government found other ways to generate income, people were less inclined to blame Prop 13.
@Bill Outcault People should have to pay higher property tax if their property appreciates. What is weird about this? If they can't afford it, they can sell their property for its inflated value and live somewhere that is in their means.
Arguments that someone should die in the house they were born only hold water if the whole family and subsequent generations cram themselves in. Otherwise society needs to expand the housing base and people need to trade down every now and then.
It is about time that the property owners that are zillionaires start paying up! Properties throughout the whole city needs a reassessment. Property owners who stash their capital in real estate and live here only enough time to avoid paying NYC taxes need to be taxed too!
Susan, what do you think will zillionaire property owners do if they are taxes quadruples? They will raise the rent times four...
@Patricia Ann Sure. Why should Manhattan zillionaires pay property taxes ? That's what the saps in Queens are here for.
Progressives like our current mayor are “wary” of addressing longstanding inequitable tax rates, but champion their ban of foie gras and carriage horses. With leaders like these, how can we not make progress?
How will the City address the fact that a massive increase in a property's tax burden will decrease its value? If taxes on a coop currently valued at $1.2 million (about average for Manhattan) rise by 50%, I would expect its market value to drop by a couple of hundred thousand.
Clearly it is long past time for property tax reform, but the City should be wary of suddenly making changes that should have been made gradually over the last two decades.
While there are a few thousands very wealthy apartment owners who could afford to pay higher taxes there are hundred thousands owners: retired, middle class, who purchased their home years ago who will not be able to pay higher taxes. Just because your home is worth a million dollars today I’d does not mean that you are a
“ millionaire “
You will not be able to afford the taxes, you and many more will try to sell the place ( who will buy it?) and move elsewhere.
It will destroy New York ( not only Manhattan)
Property taxes are regressive, and a good place to hide corruption. Tax income, including income from property, and be done with it.
@chrigid No. Property taxes are to pay for infrastructure, services and employee salaries and benefits. Everyone should pay, property owners and renters alike, rich and poor, old and young.
If property taxes force lower income or fixed income people (middle class people) out of their homes and property then those taxes are unjust.
If the change is revenue-neutral in total, but individuals' annual increases to get to the new level are capped at 20%, then the math does not work in the first few years.
This is unless it's revenue-neutral in the first year with capped increases and the revenue will then be greatly increased (higher taxes overall) in the second year and beyond.
@JJ As I understand it, the city computes an additional tax factor every year that applies to everyone's taxable value, to determine the actual dollar amount of the tax bills. I'm assuming the city would adjust that factor to maintain neutral revenue overall. So this is just pure redistribution, from people who are currently underpaying to people who are currently overpaying.
I know that there are people clamoring for "Fairness" but the problem is that this policy doesn't just effect the wealthy but also middle class income earners who have held property for >5 years. If the Mayor doesn't believe that this will cause a massive exodus then just watch...
The middle class that saw their property values rise will hence forth lose significant value on their homes and, furthermore, with the SALT tax change, suffer yet another tax indignity.
Assuming that people won't leave (particularly those that have a college education or above) is, to put it mildly, sticking your head in the sand. As property values adjust downwards, the city will grapple with that effect plus the effect of middle class income earners leaving the city and taking their 4.5% income tax dollars with them.
I would fully expect the net tax take to be very negative if they mayor caves to the pitchfork mob.
@WillD Do you realize that middle class households have had their tax burdens increase much faster than the rich? That is because of how 1-3 family homes had their tax increases capped over the years. So if they start to pay their fair share based on comparable home sale values this plan should help out a lot of the not-wealthy people.
No Eric - this plan does not do what you suggest. It must be nice living in fairy tale land where policies only affect the uber wealthy. This is not that fairy tale ending... read the fine print.
Then there is the age-old question as to whether owners of $10 million properties consume ten-times the resources of the city as do $1 million owners.
Yes they do. Juat look at Jay Z and Beyonce. Tax the rich!!!
This property tax plan should be dead on arrival. Enact it and you'll drive out middle class homeowners from NYC, let alone the wealthy who can afford to live elsewhere.
I've owned a Manhattan Co-Op apt. for 30 years. Real estate taxes have increased by 300% yet my income has not increased with the cost of living in NYC over the years. Reading this "academic exercise", for the first time made me think that, if this is pushed through, I'll have to sell my apartment and move out of New York State.
This "report" isn't worth the bytes its using up on my computer. It penalizes long-term homeowners in the city who's values have gone up, yet the only way to unlock your home's value is to sell. Our homes are not financial instruments we buy and sell, they're our HOMES. And if you jack up R.E. taxes exponentially on middle class residents we'll leave. We'll have no choice.
Take a look at who wrote this report. Political appointees, professors who love to theorize, advocates for low income renters, developers. You know who isn't represented: MIDDLE CLASS HOMEOWNERS! It's no wonder who this overhaul would impact the most. Where was OUR representation?
And if you think this will be revenue neutral to the current system, I've got a bridge along the East River to sell you. Have you ever seen a year where your assessed values decreased along with your R.E. taxes? NO, because the tax rate rises. And when the tax rate is flat, the assessed value rises.
@Robert Feiner People who own $2mil homes aren't exactly "middle class homeowners"...if they can afford homes worth that they can afford to pay more in property taxes
@Rebecca I don't own a $2 million home.
When I bought my home 30 years ago it was worth far less than it may be now, but the only way for any middle class New Yorker who's owned their home for 20+ years to afford what this report suggests to be their new tax rate would be -- to sell their home! Just because a home has increased in value doesn't mean that your cash flow or income has increased with it. The only way to unlock that value would be to sell it. And you still have to live somewhere.
If you want to increase taxes on the upper end of the market that can afford to pay more, that's one thing, let's have a discussion about that. And if you want to have a discussion on rental reforms certainly. But if you want to drive out people who have owned their homes for decades then go ahead and enact this program.
@Robert Feiner You seem to think that most co-ops would have large increases in tax bills because of this. The report advocates for putting all non-residential and non large rental buildings in the same class. Then valuing all properties based on comparable sales to generate tax bills.
Who does that hurt? People that have properties that are taxed way below their market value. And the vast majority of those units are brownstones and other dwellings of the rich. If they keep the overall tax income they want to generate under this new place the same as before a lot of people should benefit from it.
All of this is to say that one reason your tax bill has increased so much over the years is subsidizing the rich. For instance, $10 mill brownstones down the street from me pay the same tax bill I pay on my sub $1 million co-op.
How about ensuring that the developers of Madison Square Garden, the Barclays Center pay property taxes and then, figure out how much everyone else should pay.
That’s right - tax everyone with money until they move. Brilliant
Welcome the reality of the rest of NY State! In Westchester and Nassau property taxes of $15,000-$20,000 per year are common on homes selling for under $500,000. NY City home owners have been getting a break for years!
@Donna Gray Let's see. Is there a Nassau or Westchester County income tax? I don't think so. Their high property taxes are driven especially by school costs and other county needs. NYC residents pay an income tax which covers those costs already. In 1979, we were shown comparable houses in cost in Queens and Nassau counties (one mile apart); the property taxes in Nassau were four times higher. We chose Queens. If my taxes go up too much, it will hasten my departure to lower tax states in the south.
@Donna Gray Thanks for your input from Virginia!
So, the people who bought homes years ago BEFORE the ridiculous surge in value, really may not be able to afford an huge increase in taxes. Another ding to the middle class - at least in Brownstone Brooklyn. BTW, your opening paragraph makes us all sound like we've been getting away with it. Hmmm. Try not to rile things up, please. A more balanced look would be appreciated.
yes you can take a reverse mortgage so you can pay your property taxes and stay in Brooklyn. DO NOT COME TO NJ!
Reverse mortgages are not for the unwary and uneducated. Beware.
There are elderly people who have lived in the same coop for decades, long before the value of their coop increased.
This would absolutely hurt people such as the elderly who's coop value may have increased, but not their income.
Please, there must be exemptions for those who are elderly and/or who's income falls below a certain level.
This change could have unintended consequences that could potentially really harm those that it supposedly wants to help.
@Ashley : They are rich elderly people, so let's be reasonable here.
This should be a market value plus income based taxation formula that would make it a little bit fairer for the aged that are not well-off.
I don't think rentier class people who can afford two or three pied-a-terres who happen to be in their 70-80s needing tax breaks just because they're old.
I have always assumed, based on the facts stated, the following about NYC real property taxes:
1. co-ops and condos are required by law to be based on comparable rental buildings because (a) during the massive co-op conversions of the 1980's, the City would have lost a massive amount of tax revenue if co-ops were deemed to be "single-family dwellings" as co-op advocates had urged; (b) Co-ops and condos are much more "like" rental properties than owned homes: we have "proprietary leases"; in virtually all respects, it's a landlord/tenant relationship.
2. that single-family home values were relatively low (especially compared to suburbs) because the City has an enormous commercial tax base which subsidizes the dwellings of the people who they want to work in those commercial enterprises.
I see nothing unfair about this. Especially when you periodically read about scandals whereby commercial property owners bribe city tax assessors to lower the stated values of their properties so that they can pay lower taxes. So, if the City needs more money from property taxes, let the commercial buildings bear the burden--and get rid of tax abatements for ridiculous "housing" like One 57 and others like it.
Are you familiar with new rent stabilization law? No rent increases but more taxes? And the everyone (see yesterday’s facade piece) is shocked that owners don’t immediately cure every violation the city comes up with.
@Andy Deckman I'm not familiar with it, but I am not saying that residential properties of any kind should bear the burden of increased property taxes. When I say that commercial buildings should bear an increased burden, if needed, I mean buildings that house businesses--all the midtown and downtown and anywhere around town where a building is devoted to non-residential commercial purposes.
Amazing how the DOB just cracks down harder and harder and makes everything more bureaucratic and expensive while never seeming to actually stop all of the bad practices and malintent from the worst of the worst property owners.
Everytime I have to upgrade or repair something in my home, the insane cost is a secondary to the concern of navigating the DOB and added costs of doing things by their book.
It's almost like their job is to incentivize property owners to avoid making things right and safe.
Middle class people beware: You have an asset that has appreciated but hasn't triggered a taxable event. The government wants your money. There aren't enough "rich" people to pay for all
the goodies so you're next in line. This is the equality you want.
@Average Citizen What are you even talking about? They are trying to stop wealthy people from paying tiny property tax bills compared to the values of their properties. That combined with their stated goal of keeping tax income the same should mean tax breaks for a lot of middle class people. They also propose caps on maximum property taxes for low income households. I strongly suggest that you read through the report and its recommendations.
The insatiable need to be fair and yet raise money (taxes) is never ending. Combining this with the national discussion around "fair wealth distribution" is going to make for robust discussions about who has to pay and who doesn't.
And yet large corporations are given massive tax breaks.
Mayor DeBlasio advocated for Amazon headquarters in Queens which would have given Amazon almost a billion dollars in tax credits. The hypocrisy is palpable.
How is it fair that large corporations are given millions in tax breaks while misguided proposals like these will do nothing but harm middle class New Yorkers, and potentially drive them out of the state.
@Ashley Part of the recommendations is to cap the taxes for low income households. I suggest reading the recommendations in the report they thought a lot about how to ensure this isn't a burden on the elderly and low income households.
In Coops, these higher property taxes will be carried by the middle class coop owners, for the first year, until they move out of NYC. In rentals, they will be passed on to the middle class renters, until they move out. Seems that the bigger plan. It seems that the goal is to have only subsidized housing and homes for the very wealthy here.
@MJ Their goal is to bring in the same amount of total money but base the assessed value of the property on comparable sales values. You know who has been paying way less (when taking into account caps, etc.) on their properties? Brownstone owners like those in Park Slope. This will hurt the wealthy tremendously. I'd expect small fluctuations for most co-op and condo owners (not considering any abatements) and large increases for wealthy owners.
This is a big mistake. I own one of these brownstones and maintaining it as an honest landlord should means we would have less cash flow for the building. I spent $40,000 on a roof last year and anything needing fixed is immediately done. We rent under market value and we have wonderful loyal tenants that have made a home here. If you raised mine to market I will likely chose to sell and no longer own in nyc and my tenants will no longer have an under market value home. Surely we can pay more but this massive increase could be drastic on 2 family buildings and small landlords. If you don't think most landlords will not increase the rent you're dreaming. Many will forgo repairs just like the rent control measure. I hope they come to a logical middle ground where the increase is not completely devastating to people. I also love that they will waive this for certain incomes. Where is the metric for fairness these days? I'm happy to contribute, but this city can't keep taxing people to death and magically expect rents to be remain as is.
@Location01 : You're willing to rent below market value, so you're forgoing on revenue.
So the solution to your problem is to raise the rent a little higher to make the difference, no?
I think the impact on 90% of homeowners is vastly overstated. Let me explain...
There are TWO DIFFERENT caps applied to NYC property tax calculations. The first is an "assessment ratio" applied to your market value which gives you an assessed value to which they apply the tax rate against. This cap the city controls and is what they plan to eliminate based on this plan as I understand.
However, the second is a 6% cap on increases in assessed value set by STATE LAW and not by the city (just looked at my last tax document).
Unless the NYT thinks the state law will change as well, this would only impact new home owners after the city law changes and those looking to sell their homes as prospective buyers will be figuring in much larger tax bills when purchasing a new home.
This is reverse gentrification. A systemic way to wash out the highest tax paying and property owners and replacing them with low wage earners and those who produce the least. De Blasio meant when he said "there's plenty of money out there--it's just in the wrong hands."
The money is indeed in the wrong hands. the entire problem with the current system is that absentee billionaires are paying the least while we working stiffs pay the most.
@Jay You vote for socialists you get socialism!!!
Great care should be taken to not tax homeowners out of their homes. Pegging the tax amount to the value of the home is grossly unfair as that price is what some other person is willing to spend on it and has no connection to the actual homeowner’s finances. California came up with a system in 1978 so that when a home is actually sold, that sale price is used to calculate the new tax (1% of assessed value) but that tax rate can only be raised a maximum of 2% per year unless significant modification to the home is performed. That guarantees the owner a quite stable tax bill so they can properly budget. The actual tax bills for similar homes is completely dependent on when they were purchased and could vary tremendously but the rate is both calculable and stable. A tax rate at the whim of politicians or the artificial price set by real estate agents is grossly unfair.
Investigate “CA Prop 13” for details.
The only fair system is every property owner pays taxes based on the fair market value of their property, including condos and coops. Personal exemptions for say, seniors with limited income, are okay. Everything else is a distortion that benefits some and punishes others. Higher rates on commercial property are okay.
The so-called market value of my house is based on neighborhood houses 3-4 times the square footage of my house, on much larger plots and with garages.
And I can't seem to fight it.
Have you attempted to protest your valuation?
I've noticed that Brooklyn homes comparable to mine, pay thousands less in taxes.
In fact, De Blasio's house is valued at thousands more than mine, yet his taxes are thousands less.
ALL middle class homeowners in NYC should have their taxes reduced to the level of Brooklyn and Manhattan..
NO MORE FREE RIDE.
In New Jersey we have property revaluations every few years. Sure, we fight about our own valuations and sometimes we get adjustments. Then the tax bill is spread over all of the properties and each property owner pays his share based on the value of the property. We are all used to this. It seems like New York City needs to catch up with us.
Property taxes should not be based on annual income except for obvious low-income situations and this is addressed by rebates and low-income housing.
It will be interesting to see the arguments against this proposal. It doesn't seem like they would be able to hold any water.
Mr. Griffin's purchase received more media attention than any transaction in history and served as a springboard for NYC to increase mansion and state tax. The market took notice and absorbed it. The market will not and cannot absorb a sweeping overhaul like this. Mr. Goldstein's comments about "a mass exodus" are ignorant and arrogant. It is already happening. Inventory is nearing peak levels even though interest rates are at all-time lows. The tax overhaul coupled with Salazar's "good cause eviction" bill are absurd on so many levels.
We purchased our home for a fraction of its current value. We were able to do so with the help of an fha loan and the benefit of low property taxes. Our current home value is not money we have on hand. It’s equity, but not liquid cash we have access to. We are not rich. When 20 years from now we must sell to afford to be able to retire, we will be taxed heavily on the sale. Taxing exorbitantly based on exaggerated market values will force middle class and lower income home owners out of their homes. Basically, this tells us all, homeownership is only for the wealthy in nyc.
As the President of a 45 unit coop in Park Slope I am
acutely aware of the effects on the budget of skyrocketing appraised values that lead to higher real estate taxes.
While recent purchasers may have big incomes with good upside potential the increases are also imposed on tenant shareholders who have often lived in their unit for years and even decades.
Some are retired and living on a fixed income. Some are living in an apartment that was easily affordable for them just a few years ago but the maintenance has increased dramatically, driven largely by tax increases and stretching their budget.
More of the same will only serve to force middle and upper middle class owners to sell to more affluent buyers - exacerbating the problem the city is trying to solve.
If you must tax them, tax them on real profits when they sell. Large taxes on unrealized gains is not the answer.
This proposal will punish middle class people who have spent their entire lives working and living in the same community for decades.
I'm all for the pied e terre tax for those very wealthy who are not primary residents of their units.
However, this completely misguided proposal will harm the middle class who make up the backbone of their community.
It will further serve to stratify the increasing gap between the very wealthy and the poor in this city, while pushing out those New Yorkers who are the glue and fabric of their communities, buildings and neighborhoods. Please do not let this pass.
Please consider this scenario.
If someone purchased a coop in the Village in 1980 for $200,000 and spent this entire time living in the same unit, working at a middle class job.
The value of their coop has skyrocketed because of the location and is now assessed at a million dollars.
How is this person supposed to be able to afford taxes on a million dollar apartment?
They will be forced to sell someone who is rich enough to afford a million dollar apartment.
This person who has spent practically their entire life in the same apartment, building and neighborhood will be forced to move out of the building and the community they have lived in for decades.
YES!!! Let's tax the rich more!! Then they can leave for Florida. and the city's other revenues can plummet. Great idea.
We can also chase all corporations out of NYC and everyone can move to Austin or Oklahoma.
Does anyone remember 1981? Because I do.
I own a small (912 sf) 1-family house on SI and my property taxes for next year will be $5900.
Many NYC renters are under the delusion that Property Tax Reform will lower their rents because of lower property taxes on Class-2 (Apartments, Condos, Coops) properties. I don’t think so. If anything Class-2 properties should be taxed at a higher rate than Class-1 (1,2,3 family homes). The average class-2 property contains 8 residential units and on average in 12 stories tall. Sounds like an income generating business better able to absorb tax increases, and should be taxed like a business with higher taxes phased in over 10 years.
The average class-1 property contains 1.5 residential units and on average is two stories tall. The rental income is tiny compared to class-2. 70% of the residential units in NYC are in class-2 properties.
The bigger problem is that there appears to be no way to reform the system without causing more problems, particularly in the 1,2,3 family home real estate market. Trusting deBlasio with this is asking for trouble. His administration has already started to wage war on 1,2,3 family homeowners with ‘green’ proposals that will only increase the cost of new homes, making suburban homes more financially attractive.
The whole situation is just a huge mess…
NYC tax class-1 and tax class-2, from nyc public databases - http://pc.cd/orJ
This smells like a conspiracy. A lot of people will have to sell their houses. Developers and the real estate industry will make a killing just to punish a few people that have been owning their houses for decades and therefore their property taxes are low. Why don’t they go after the ridiculous tax abatements. Billion s of dollars in tax revenue are wasted to the benefit of developers with no benefit to our citizens.
I hadn't thought of that. Even if you're right (possible), it will be a one time windfall followed by a drop in transactions when those who can afford their new tax bills stay in place and try to ride out lower real estate values.
The recent rent reforms have diminished activity and thus all of the transaction taxes that the city and state have become accustomed to.
It's not healthy to be so dependent on this industry, but like most broken things in NY the legislators have pinned themselves into this corner. Every time they come up with a new way to create a "fairer" system, they end up having to go back to the piggy bank (taxpayers) to come up with another way to plug the leaky dam.
As other commenters have pointed out, interest groups and unions more collectively are given a pass and get to look the other way when it comes time to come up with creative ways to stop burning so much public money.
The end result is usually feel good political actions followed by real world problems for individuals. In the case of rent reforms, small building owners are having the hardest time adjusting. And in a decade or two down the line, rent control tenants in decrepit buildings that their owners cant afford to fix will be the next victims.
In the case of tax reform, there do actually stand to be some individual winners until the city realizes it needs new revenue streams due to a decrease in transactions activity. Net neutral only in their dreams!
Let me understand this: Saving long and hard to buy a home within NYC is something that should be punished by taxing people to death? As my good friend would say: Do good, just not too good. You all are making it near impossible to be a Democrat in this City.
"For many years, owners of multimillion dollar residences in places like Park Slope, Brooklyn, have paid less in property taxes than lower-valued homes in other parts of the city"
You think this came about by accident?
No. It shows how the Ultra Rich control local politics where it counts . Taxes
For an example how they control National politics read
https://www.nytimes.com/2007/07/30/washington/30schumer.html
Let's scare away all of the decent people from New York City by taxing the heck out of them. Bring back the Lindsay and Koch days.
Start by limiting overtime for City employees to emergency situations. Private industry rarely allows overtime. The City should be on a much tighter budget.
If the City fails to keep the lid on overtime, only the rich can ever retire in New York City.
Taxing in proportion to fair market value is a good goal, but fleeces homeowners if the City is overspending.
Taxes across the country would be slashed if we returned to the draft and included most civil service jobs under its conscription. Draftees can be paid a small stipend versus the salaries we allow those who work for us to extort from hapless politicians.
It looks like the proposal would value coops individually and not a whole building as under the current system. Right now long time coop owners potentially pay taxes on the renovations of rich new buyers in the building.
One problem is valuing properties every year. Our coop’s property taxes have increased at more than twice the cost of living over the last 35 years under this system. The proprietary algorithm spits out tax increases at a much higher rate than our property value has increased. The coop has increased in value by 1.37 times the cost of living. So our coop’s property taxes as a percentage of market value have been skyrocketing each year due to a Vegas-style algorithm where the house always takes the lions share of the money.
It is not clear revaluation will fix this if the City’s taxes on the whole have gone up by a factor of two thirds of market values in the last 40 years due to out of control spending by the City.
The next mayor ought to be running on a platform of no wasteful spending.
Coop ownership represents not the real property but the share of the corporation that the unit represents. That and the fact that cops are generally formed from former rental properties is the basis for that method of taxing.
The rest of the country is typically fine paying very high property taxes based on periodic market assessments without caps if the public school the home is zoned for is very good. One issue in NYC is that the public school system isn’t great. And often you can have an apartment that has sky rocketed in value but sits in a bad public school zone. It would be hard for families to justify paying the higher tax rate on a property that has risen in value but had been protected by the old system’s tax cap if there’s not an excellent public school. Those are the property prices that would decline dramatically. Something to think about if this passes.
There must be some adjustment to make taxing fairer, but a very radical change will hurt the middle class even more than the rich. This must be apptoached incrementally and with great thought. No problem taxing the ultra rich with 10 million dollar apartments, but the working guy living in a decent neighborhood: be careful.
The assessor should publish enough detail on each unit so that other owners and appraisers can compare them with market sales and all properties should be assessed at full market value. In other places, property owners apply for readjustments down from the valuation so that it is accurate. They say property x has an amenity that mine does not and therefore my property should be assessed for less. Then the amount to be raised from property taxes, X, is divided by the total valuation, Y, and all properties pay x/y annual tax. Since NYC has an income tax, it can use that to adjust rates to help people with lower incomes. It could say that there will be no city income tax below $50,000 -$100,000 per person. If you adjust property taxes based on who lives in a building, you are inviting fraud.
Will this not simply force out low income people who own their apartments in gentrifying neighborhoods? The market value of a property may be high, but the last few residents who don't want to move should not be forced out due to ridiculously high property taxes. That seems to only punish the poor.
Many people bought homes decades ago in places all over Brooklyn not as an investment but because they needed a place to live. And yes, they are often sitting on gains (that will be taxed upon sale) that make them look rich to others.
I know of teachers, police officers, physical therapists, architects and artists all in this situation. The additional income to pay huge new tax bills doesn’t suddenly appear just because your neighborhood got “hot” in the last few years.
This will be fun to watch. Money does not appear like manna so people that think they are middle class will be viewed as "rich" by those wanting them to pay their "fair share". Taxes are good as long as someone else pays, which explains the exodus of people from NY and California to low or no tax states. I'm still trying to figure out why our progressive mayor and even more (if that's possible) progressive city council never think of spending less. I guess that's too challenging.
"After an investigation revealed abuses at a shop in Manhattan, support for a bill to ban retail sales of dogs, cats and rabbits."
Better that the City Council try to investigate fraud and waste in city agencies so that they do not have to go after middle-class homeowners.
Soft targets -- the City Council excels in Dilly exercises. Inspect pet stores, don't ban them. Regulate horse-drawn carriages -- don't ban them.
And for heaven's sake, start a pro-birth control campaign so that fewer children are brought up unmannered, undereducated, and dependent on low-income housing, subsidies, and middle-class taxes for their survival.
So, if you are retired but have lived in your home for decades (t BTW, a home NO ONE wanted 45 years ago because people were fleeing Brooklyn and NY at the time), and have built up your community by improving your home, encouraging and helping your neighbors with their home-fix ups, improved your entire community working through your volunteer association to make sure local businesses were patronized , helped with traffic calming, and even participated in neighborhood watches at night to keep everything safe...and the market value increases because of this work over decades - you are to be penalized with more taxes in your retirement (so much so that you will have to move)? That is fair? Older people should be allowed to live in their own homes, at reliable and reasonable tax levels, until they die. To "adjust" now is patently unfair and will throw a whole lot of people, in their remaining, last years, into terrible turmoil. Fair? Huh?
Non-resident and corporate residential property owners who have second (third, fourth?) homes here are artificially inflating housing costs. It's time for them to help rectify that situation. They should have an annual property tax equal to 100% of the appraised value of their property that goes directly into a fund for affordable housing. Some of the owners (and real estate agents) will be shocked and appalled and may sell: that's great, that process will help make housing more affordable for residents, the people who make this city great. And who knows, it may cause a few people who don't reside in NYC for tax reasons to move back for tax reasons.
Property values in Brooklyn have skyrocketed while property taxes have not, compared to Manhattan. A similarly valued brownstone in the Village will pay 5 times more tax than a house in Brooklyn Heights or Cobble Hill. Property tax should be based on what your house would sell for if you sold it, with some kinds of exceptions for low income homeowners whose homes are their sole asset. If your neighbor is a zillionaire renovator, it shouldn’t affect your taxes, only his.
Do you own a house in Brooklyn? My property tax has tripled over 20 years. My income hasn't -- quite the contrary. My relatively very insignificant house is taxed based on the value of other houses in neighboring areas. Those houses do fetch a lot. Mine, for several reasons having nothing to do with how much money and personal sweat I've spent in maintaining it, never will.
@B. If you believe the City overestimated the value of your house, can't you appeal that valuation?
@Eliza Hays Please show me a brownstone in the Village that is similarly valued to a brownstone in Cobble Hill
The issue is the ever present one of Owners In Gentrifying Neighborhoods. The article focuses on the tax advantages afforded the wealthy new arrivals, but ignores the challenges to the pioneer owners of modest means of current and future tax increases. Cities and states across the nation have put in place protections for these owners based on age, length of tenancy, and the like. New York City, and the state as well, should do the same. Otherwise we're turning our cops, teachers, and firefighters, the middle class that makes the city work, out of their homes.
@Mark . The article is short on specifics, but the proposed changes do include a income- dependent cap on real estate taxes based on the declared income of those owners who actually reside in New York City. Also, I know very few cops or teachers who own a multimillion townhouse in the Slope.
But when well-heeled neighbors buy houses next door and down the block, at higher prices than one paid 20-30 years ago (or, in the case of many people I know, 50-60 years ago), one's own property tax rises.
@Pete in Downtown Well go to Bed Stuy or Clinton Hill and you will find middle class people still owning homes. And byw, most of us who have lived and owned in Brownstone Brooklyn for decades and generations were never grateful to see our communities destroyed via gentrification. This plan will simply finish driving the rest of us out so the rich can take over our cherished homes (yes these are our homes not investments!)
NYC and state need to rather focus on finding ways to manage their sky high tax revenues better and deliver better services from transit to sanitation and infrastructure before they look for more money.
@Hisham Oumlil The whole idea with this plan is not to raise more money but to raise the same money more equitably.
@Sk When have politicians not taken the opportunity to make taxes equitable and get more tax money at the same time. When they make a tax to "raise money" for a cause do they ever retire that tax?
These recommended changes to our real estate tax structure make sense, and will therefore not happen. After all, this is New York! A more just and equitable tax system - not with this governor, not with this mayor.
Park Slope residents loves progressivism and progressive tax policy until it affects them personally.
Go ahead and change it.. Rents in market value brownstone buildings will only escalate as these taxes get passed on. The article cites Park Slope, but values have skyrocketed in Bed-Stuy, Bushwick, and Clinton Hill, among others. Hard to imagine saddling the "real New Yorkers" according to Brooklyn Boro Pres. Eric Adams with a stiff increase in their property taxes. Lower tax areas of the Bronx will probably see gentrification accelerate as buyers see the low-tax incentives there. Maybe De Blasio and City Council should try something novel and try cutting property taxes...
@c - Fat chance. The Mayor and City Council are addicted to spending other people's money. When DeBlasio took over the City funded portion of the budget was $52 billion and the headcount was 260k, now the City funded budget is $70 billion with a headcount of 282k. Do the math, the money has to come from somewhere...
Over the course of twenty years, our Flatbush property taxes have almost tripled. Our house taxes are based, unfairly, on the huge detached Queen Annes to the north and east of us, with their lawns and large garages, worth 3-4 times what we might get for ours. I'd like to be carried feet-first out of our home when the time comes. That will be predicated on whether we can continue to pay property taxes that do not reflect the value of our house, crime upticks in Flatbush (I do not think I can stand a reprise of those 30 years of Brooklyn squalor I already lived through), and whether the religious right will make it even more difficult for me to give myself a dignified death on my terms.
The reformers should research Coase's theorem. If there was an "unfair" advantage in the form of lower property taxes on a house, it would sell for higher on the open market because that advantage would be priced in. the only person that benefited from the high advantage is the owner that got a sudden windfall in value when the tax law was first passed. implementing this reform just penalizes newer buyers of expensive homes by taking away a benefit they bargained for by paying a higher price and then gives a windfall to homeowners seeking to decrease their own tax bills. This reform will also arbitrarily impact rental rates across neighborhoods.
@David . Why should the many owners of apartments subsidize the house value of affluent home buyers who were banking on an artificially low real estate tax when they bought their house? Because that is what's currently happening!
@Pete in Downtown This proposal does nothing to reduce taxes paid by apartment owners -- their taxes will increase also under this proposal.
The SALT elimination bites hard enough already. Implement this proposed tax change and there will be unintended consequence and lower tax receipts as property values fall and high income taxpayers leave NYC.
From the tone of many of these responses, I sense most of them are renters who would not be affected. I live in Brooklyn and have a brownstone, not in Park Slope. The problem with this argument and for many of those who comment is, that most New Yorkers are renters. You do see that these tax increases will just be passed onto you, and for those who are rent controlled, your buildings will just fall into disrepair because the owners can no longer afford upkeep. Be careful what you wish for. Not every property owner is a billionaire. I agree that I am willing to pay exorbitant personal tax rates to have reasonable property tax rates, and there are plenty of us who have large mortgages to pay, and would find ourselves unable to afford our homes anymore. Property values would fall. Lower value and lower tax collection.
@Mark Valid points, but if the conclusion is that property values fall, doesn’t that mean the tax will come down too? Put another way, for the “middle market”, could it be a mark down on the value and neutral on the tax? Which means that if someone is not over levered, they’d be fine.
My landlord is a fraud, and I would love to see him pay full-value on his $1.7M brownstone rather than the $9k/year for his $110,000 assessed value. He lives in Bali, the building is in disrepair, and he has told all of his tenants not to contact him because it "reduces his quality of life." I am sorry for all of the honest homeowners who will be negatively affected by this change, but it's people like my terrible landlord that are probably the reason.
Sounds like you should move out or you just paying really cheap to put up with him.
If this property tax reform were implemented, I can foresee a rash of burning brownstones in the city: "Mayor's 2 homes mysteriously burn to the ground, reducing the entire blocks of attached brownstones to ash, forcing the bankruptcy of all the insurance companies in New York. Government officials are perplexed."
Deblasio And Johnson would love this change because it plays into developers hands. I live near Park slope My taxes have already gone up significantly in the last number of years. Any big increase to come is essentially the end of my current 2 renters in a 3 family. The cost will force a move to market rate which neither can afford even though they have pretty good jobs, I'm happy to keep their rent low for as long as I can. The tax code has been used to gentrify and outright steal land from people throughout the country(Hawaii being the worst). This plan cites raising taxes in with fast rising prices, this can only put to large a financial burden on longtime residents forcing sales. This is exactly what the Mayor and the city council want to see happen. What's good for real estate corp is good for politicians pockets.
The appraised value of a property is not relevant until it has been sold. Yes, I get cold calls offering to pay ridiculous amounts for my apartment, but it is my home. I just want to keep living here as I have for years. Some of us have lived in coops for decades; the appraised value has skyrocketed due to foreign investors or others taking apartments in the neighborhoods, but our own incomes have not gone up. Already property taxes on our building have gone up 300% in recent years. There should be higher taxes on second homes and investors, but full-time long-term residents should not be priced out of their homes by skyrocketing taxes based on the concept of market value.
@Lynn Appraised value is also relevant for taking out loans against the value of the home, i.e. you don't have to sell to benefit.
Loans require payments with interest. It is not a good thing for retirees to take out loans against their houses. That's how people loses their homes.
Lose their homes. (Who am I, Eric Adams, with no sense of subject-verb agreement?)
Artificially low taxes account for a portion of the enormous rise in residential real estate prices and rent. How mush I'll have to leave to the experts. But when the City cries that it doesn't get its fair share of education funding, it has to look at where that comes from. Property tax. The federal SALT elimination is however,the elephant in the room. It cannot be changed except by electing a new President and Congressmen willing to attack the Trump tax changes. It punishes New York and other higher cost states; and a large portion of homeowners in NYC and the NY Metro region. And that was intentional.
@cheryl - The SALT elimination is only for Federal taxes. It means someone earning $500,000 in NY, South Dakota or Florida (as examples) all have the same Federal tax liability. Otherwise one tax payer has his Federal taxable income lowered by the deduction and thus subsidized by the other!
@Donna Gray the economics are much more complicit than that.
@Donna Gray New York is one of those states which pays more in federal taxes than South Dakota or FL and did so before the elimination of the deduction. SO a close look at who's subsidizing whom may be in order. Plus that deduction helped make make it possible for working people in this general area to have their own homes. Look at people earning in the $50,000 to $150,000 range, whose average homes have taxes which inevitably - for long time residents - end up far higher than their initial mortgages( Which are still deductible at most levels). For single individuals, especially older single taxpayers, that $10,000 exemption often doesn't cover their tax expenditures, and results with their paying significantly higher federal taxes. And it's in amounts which hurt middle and working class people. The deduction for property taxes could be phased out in stages related to AGI, eliminating that $500,000 and up group you think is the norm, and/or giving some other relief to help people maintain their homes. Now it simply hurts many working people trying to get by, - and retired people, who want to live in their own homes - who don't get many other breaks.
Do these commissioners realize that the market value of a brownstone doesn't necessarily match the income of the homeowners? So yes, a property might be worth $2 million, but the homeowners might have bought the house years ago when it wasn't worth as much and the family was earning a modest income. In the current period, the house is worth $2 million, but the family might be earning a lot less. In fact, the owners might be on a fixed income. This is going to push homeowners out of their homes and hasten gentrification.
@Barbara You may wish to read the article again. There are two proposed provisions designed specifically to address the scenario you are describing. From the article: "One, a “partial homestead exemption,” would help people who live in their homes with income below a certain level..." "The second measure, called a “circuit breaker,” would limit tax bills to a certain percentage of household income."
@Barbara Indeed! I am one of those home-owners. I bought my home decades ago in a price range I could afford. My income has barely gone up at all over the decades since, but my home has gone up in value astronomically. I agree with taxing homes more equitably, but there should definitely be limits on how much taxes should increase for existing owners!
@Barbara You are correct and that's what the real estate developers who OWN most of the City Council want- a city of, buy and for the rich. The rest of us can get out!
The real estate developers and City elite have spent decades trying to make this a city only for the rich. And they are succeeding. According to the NYT a family now needs at least $300,000 just to be considered middle class and it won't buy you a home/condo for a family of 4 which costs millions. When the Council raises those taxes on brownstones in Bed Stuy, Clinton Hill etc they will finish driving out the last of middle and working classes of all races and ethnicities who formed the backbone of our communities for decades and generations. How will a retired everyday Brooklynite who's owned a brownstone for 40 years or the middle/working class family pay such real estate taxes which are already pushing $12,000 and up? Yeah, the millionaire next door can pay, but his middle/working class neighbor cannot. So what happens? The modest homeowner must sell and go and isn't that what the real estate developers and the elite want? The want our homes. They want our neighborhoods. They want our lives. If the Council wants to charge those who buy a property at millions those new tax rates feel free, they can pay it. But applying this to those of us who have formed the backbone of our neighborhoods for decades and generations such usurious rates is just another tactic to drive us out and unless we stand up to them we, along with our children and grandchildren will soon be gone!
@RFS That's exactly what it is. There is no other way to make sense of this. They want us to go one way or another!
@Pike Yes, that's exactly what they want and it's time we stopped them.
@RFS And that is precisely the point: You have an asset with an unrealized capital gain and the government wants a piece of it. Now you know how the "rich" feel.
Property taxes increase the holding costs of speculators and reduce speculation. Massive exemptions or limits on property taxes, like in California, lead to disaster. Along with homestead and other protections mentioned in this article, this is good policy.
What a horrible idea! Raising taxes as proposed will make living in NYC for retired people on fixed income impossible. Rental rates will zoom up driving away many young and old people, rental rates in shops will zoom up as well, making owning a small business- a tough task already, impossible. There will be a mass exodus of people and business out of the city. Bottom line: using the same tax percentage rate in the real (theoretical ) value of the property will kill NYC . Yes and then the property values will sink to an affordable level...too late though
While everyone seems to agree that property taxes should be arrived at equitably, it's difficult arriving at a solution that is fair to everyone involved. Affixing the taxes on a fair market value based system leaves people who bought a home years ago, whose wages or retirement income haven't appreciated anywhere near what the real estate market has, at a distinct disadvantage. The potential offsets proposed in the plan based on income are vague and almost certain to be insufficient. What seems a fairer system, used in California, is based on purchase price with adjustments made for inflation and improvements. People who've been in their homes for years without making major renovations enjoy some stability in their property taxes. People who arrive later and whose purchase price is higher pay and whose income is probably higher pay more in property taxes. Gentrifiers and house flippers who move in and remodel a home also pay more as a result of their modifications. This is a system that, in addition to being fairer all around, also helps maintain the fabric of the neighborhoods by not taxing the long time residents out and removes the economic stress of gentrification and development to the communities.
@Bill Outcault Except that system (believe it was Proposition 8) had disastrous outcomes, ruined education in many Californian communities (literally, no money) and is widely seen as an example of what not to do.
@Pete in Downtown It was Prop 13 in 1978 and it still has 65% of potential voter's support. The disastrous outcomes you refer to were because the state, at the time, was overly reliant on property taxes to pay for everything. After the dust settled from the proposition's initial passage and the government found other ways to generate income, people were less inclined to blame Prop 13.
@Bill Outcault People should have to pay higher property tax if their property appreciates. What is weird about this? If they can't afford it, they can sell their property for its inflated value and live somewhere that is in their means. Arguments that someone should die in the house they were born only hold water if the whole family and subsequent generations cram themselves in. Otherwise society needs to expand the housing base and people need to trade down every now and then.
It is about time that the property owners that are zillionaires start paying up! Properties throughout the whole city needs a reassessment. Property owners who stash their capital in real estate and live here only enough time to avoid paying NYC taxes need to be taxed too!
Susan, what do you think will zillionaire property owners do if they are taxes quadruples? They will raise the rent times four...
@Patricia Ann Sure. Why should Manhattan zillionaires pay property taxes ? That's what the saps in Queens are here for.
Progressives like our current mayor are “wary” of addressing longstanding inequitable tax rates, but champion their ban of foie gras and carriage horses. With leaders like these, how can we not make progress?
How will the City address the fact that a massive increase in a property's tax burden will decrease its value? If taxes on a coop currently valued at $1.2 million (about average for Manhattan) rise by 50%, I would expect its market value to drop by a couple of hundred thousand. Clearly it is long past time for property tax reform, but the City should be wary of suddenly making changes that should have been made gradually over the last two decades.
While there are a few thousands very wealthy apartment owners who could afford to pay higher taxes there are hundred thousands owners: retired, middle class, who purchased their home years ago who will not be able to pay higher taxes. Just because your home is worth a million dollars today I’d does not mean that you are a “ millionaire “ You will not be able to afford the taxes, you and many more will try to sell the place ( who will buy it?) and move elsewhere. It will destroy New York ( not only Manhattan)
Property taxes are regressive, and a good place to hide corruption. Tax income, including income from property, and be done with it.
@chrigid No. Property taxes are to pay for infrastructure, services and employee salaries and benefits. Everyone should pay, property owners and renters alike, rich and poor, old and young.
If property taxes force lower income or fixed income people (middle class people) out of their homes and property then those taxes are unjust.
If the change is revenue-neutral in total, but individuals' annual increases to get to the new level are capped at 20%, then the math does not work in the first few years. This is unless it's revenue-neutral in the first year with capped increases and the revenue will then be greatly increased (higher taxes overall) in the second year and beyond.
@JJ As I understand it, the city computes an additional tax factor every year that applies to everyone's taxable value, to determine the actual dollar amount of the tax bills. I'm assuming the city would adjust that factor to maintain neutral revenue overall. So this is just pure redistribution, from people who are currently underpaying to people who are currently overpaying.
I know that there are people clamoring for "Fairness" but the problem is that this policy doesn't just effect the wealthy but also middle class income earners who have held property for >5 years. If the Mayor doesn't believe that this will cause a massive exodus then just watch... The middle class that saw their property values rise will hence forth lose significant value on their homes and, furthermore, with the SALT tax change, suffer yet another tax indignity. Assuming that people won't leave (particularly those that have a college education or above) is, to put it mildly, sticking your head in the sand. As property values adjust downwards, the city will grapple with that effect plus the effect of middle class income earners leaving the city and taking their 4.5% income tax dollars with them. I would fully expect the net tax take to be very negative if they mayor caves to the pitchfork mob.
@WillD Do you realize that middle class households have had their tax burdens increase much faster than the rich? That is because of how 1-3 family homes had their tax increases capped over the years. So if they start to pay their fair share based on comparable home sale values this plan should help out a lot of the not-wealthy people.
No Eric - this plan does not do what you suggest. It must be nice living in fairy tale land where policies only affect the uber wealthy. This is not that fairy tale ending... read the fine print.
Then there is the age-old question as to whether owners of $10 million properties consume ten-times the resources of the city as do $1 million owners.
Yes they do. Juat look at Jay Z and Beyonce. Tax the rich!!!
This property tax plan should be dead on arrival. Enact it and you'll drive out middle class homeowners from NYC, let alone the wealthy who can afford to live elsewhere. I've owned a Manhattan Co-Op apt. for 30 years. Real estate taxes have increased by 300% yet my income has not increased with the cost of living in NYC over the years. Reading this "academic exercise", for the first time made me think that, if this is pushed through, I'll have to sell my apartment and move out of New York State. This "report" isn't worth the bytes its using up on my computer. It penalizes long-term homeowners in the city who's values have gone up, yet the only way to unlock your home's value is to sell. Our homes are not financial instruments we buy and sell, they're our HOMES. And if you jack up R.E. taxes exponentially on middle class residents we'll leave. We'll have no choice. Take a look at who wrote this report. Political appointees, professors who love to theorize, advocates for low income renters, developers. You know who isn't represented: MIDDLE CLASS HOMEOWNERS! It's no wonder who this overhaul would impact the most. Where was OUR representation? And if you think this will be revenue neutral to the current system, I've got a bridge along the East River to sell you. Have you ever seen a year where your assessed values decreased along with your R.E. taxes? NO, because the tax rate rises. And when the tax rate is flat, the assessed value rises.
@Robert Feiner People who own $2mil homes aren't exactly "middle class homeowners"...if they can afford homes worth that they can afford to pay more in property taxes
@Rebecca I don't own a $2 million home. When I bought my home 30 years ago it was worth far less than it may be now, but the only way for any middle class New Yorker who's owned their home for 20+ years to afford what this report suggests to be their new tax rate would be -- to sell their home! Just because a home has increased in value doesn't mean that your cash flow or income has increased with it. The only way to unlock that value would be to sell it. And you still have to live somewhere. If you want to increase taxes on the upper end of the market that can afford to pay more, that's one thing, let's have a discussion about that. And if you want to have a discussion on rental reforms certainly. But if you want to drive out people who have owned their homes for decades then go ahead and enact this program.
@Robert Feiner You seem to think that most co-ops would have large increases in tax bills because of this. The report advocates for putting all non-residential and non large rental buildings in the same class. Then valuing all properties based on comparable sales to generate tax bills. Who does that hurt? People that have properties that are taxed way below their market value. And the vast majority of those units are brownstones and other dwellings of the rich. If they keep the overall tax income they want to generate under this new place the same as before a lot of people should benefit from it. All of this is to say that one reason your tax bill has increased so much over the years is subsidizing the rich. For instance, $10 mill brownstones down the street from me pay the same tax bill I pay on my sub $1 million co-op.
How about ensuring that the developers of Madison Square Garden, the Barclays Center pay property taxes and then, figure out how much everyone else should pay.
That’s right - tax everyone with money until they move. Brilliant
Welcome the reality of the rest of NY State! In Westchester and Nassau property taxes of $15,000-$20,000 per year are common on homes selling for under $500,000. NY City home owners have been getting a break for years!
@Donna Gray Let's see. Is there a Nassau or Westchester County income tax? I don't think so. Their high property taxes are driven especially by school costs and other county needs. NYC residents pay an income tax which covers those costs already. In 1979, we were shown comparable houses in cost in Queens and Nassau counties (one mile apart); the property taxes in Nassau were four times higher. We chose Queens. If my taxes go up too much, it will hasten my departure to lower tax states in the south.
@Donna Gray Thanks for your input from Virginia!
So, the people who bought homes years ago BEFORE the ridiculous surge in value, really may not be able to afford an huge increase in taxes. Another ding to the middle class - at least in Brownstone Brooklyn. BTW, your opening paragraph makes us all sound like we've been getting away with it. Hmmm. Try not to rile things up, please. A more balanced look would be appreciated.
yes you can take a reverse mortgage so you can pay your property taxes and stay in Brooklyn. DO NOT COME TO NJ!
Reverse mortgages are not for the unwary and uneducated. Beware.
There are elderly people who have lived in the same coop for decades, long before the value of their coop increased. This would absolutely hurt people such as the elderly who's coop value may have increased, but not their income. Please, there must be exemptions for those who are elderly and/or who's income falls below a certain level. This change could have unintended consequences that could potentially really harm those that it supposedly wants to help.
@Ashley : They are rich elderly people, so let's be reasonable here. This should be a market value plus income based taxation formula that would make it a little bit fairer for the aged that are not well-off. I don't think rentier class people who can afford two or three pied-a-terres who happen to be in their 70-80s needing tax breaks just because they're old.
I have always assumed, based on the facts stated, the following about NYC real property taxes: 1. co-ops and condos are required by law to be based on comparable rental buildings because (a) during the massive co-op conversions of the 1980's, the City would have lost a massive amount of tax revenue if co-ops were deemed to be "single-family dwellings" as co-op advocates had urged; (b) Co-ops and condos are much more "like" rental properties than owned homes: we have "proprietary leases"; in virtually all respects, it's a landlord/tenant relationship. 2. that single-family home values were relatively low (especially compared to suburbs) because the City has an enormous commercial tax base which subsidizes the dwellings of the people who they want to work in those commercial enterprises. I see nothing unfair about this. Especially when you periodically read about scandals whereby commercial property owners bribe city tax assessors to lower the stated values of their properties so that they can pay lower taxes. So, if the City needs more money from property taxes, let the commercial buildings bear the burden--and get rid of tax abatements for ridiculous "housing" like One 57 and others like it.
Are you familiar with new rent stabilization law? No rent increases but more taxes? And the everyone (see yesterday’s facade piece) is shocked that owners don’t immediately cure every violation the city comes up with.
@Andy Deckman I'm not familiar with it, but I am not saying that residential properties of any kind should bear the burden of increased property taxes. When I say that commercial buildings should bear an increased burden, if needed, I mean buildings that house businesses--all the midtown and downtown and anywhere around town where a building is devoted to non-residential commercial purposes.
Amazing how the DOB just cracks down harder and harder and makes everything more bureaucratic and expensive while never seeming to actually stop all of the bad practices and malintent from the worst of the worst property owners. Everytime I have to upgrade or repair something in my home, the insane cost is a secondary to the concern of navigating the DOB and added costs of doing things by their book. It's almost like their job is to incentivize property owners to avoid making things right and safe.
Middle class people beware: You have an asset that has appreciated but hasn't triggered a taxable event. The government wants your money. There aren't enough "rich" people to pay for all the goodies so you're next in line. This is the equality you want.
@Average Citizen What are you even talking about? They are trying to stop wealthy people from paying tiny property tax bills compared to the values of their properties. That combined with their stated goal of keeping tax income the same should mean tax breaks for a lot of middle class people. They also propose caps on maximum property taxes for low income households. I strongly suggest that you read through the report and its recommendations.
The insatiable need to be fair and yet raise money (taxes) is never ending. Combining this with the national discussion around "fair wealth distribution" is going to make for robust discussions about who has to pay and who doesn't.
And yet large corporations are given massive tax breaks. Mayor DeBlasio advocated for Amazon headquarters in Queens which would have given Amazon almost a billion dollars in tax credits. The hypocrisy is palpable. How is it fair that large corporations are given millions in tax breaks while misguided proposals like these will do nothing but harm middle class New Yorkers, and potentially drive them out of the state.
@Ashley Part of the recommendations is to cap the taxes for low income households. I suggest reading the recommendations in the report they thought a lot about how to ensure this isn't a burden on the elderly and low income households.
In Coops, these higher property taxes will be carried by the middle class coop owners, for the first year, until they move out of NYC. In rentals, they will be passed on to the middle class renters, until they move out. Seems that the bigger plan. It seems that the goal is to have only subsidized housing and homes for the very wealthy here.
@MJ Their goal is to bring in the same amount of total money but base the assessed value of the property on comparable sales values. You know who has been paying way less (when taking into account caps, etc.) on their properties? Brownstone owners like those in Park Slope. This will hurt the wealthy tremendously. I'd expect small fluctuations for most co-op and condo owners (not considering any abatements) and large increases for wealthy owners.
This is a big mistake. I own one of these brownstones and maintaining it as an honest landlord should means we would have less cash flow for the building. I spent $40,000 on a roof last year and anything needing fixed is immediately done. We rent under market value and we have wonderful loyal tenants that have made a home here. If you raised mine to market I will likely chose to sell and no longer own in nyc and my tenants will no longer have an under market value home. Surely we can pay more but this massive increase could be drastic on 2 family buildings and small landlords. If you don't think most landlords will not increase the rent you're dreaming. Many will forgo repairs just like the rent control measure. I hope they come to a logical middle ground where the increase is not completely devastating to people. I also love that they will waive this for certain incomes. Where is the metric for fairness these days? I'm happy to contribute, but this city can't keep taxing people to death and magically expect rents to be remain as is.
@Location01 : You're willing to rent below market value, so you're forgoing on revenue. So the solution to your problem is to raise the rent a little higher to make the difference, no?
I think the impact on 90% of homeowners is vastly overstated. Let me explain... There are TWO DIFFERENT caps applied to NYC property tax calculations. The first is an "assessment ratio" applied to your market value which gives you an assessed value to which they apply the tax rate against. This cap the city controls and is what they plan to eliminate based on this plan as I understand. However, the second is a 6% cap on increases in assessed value set by STATE LAW and not by the city (just looked at my last tax document). Unless the NYT thinks the state law will change as well, this would only impact new home owners after the city law changes and those looking to sell their homes as prospective buyers will be figuring in much larger tax bills when purchasing a new home.
This is reverse gentrification. A systemic way to wash out the highest tax paying and property owners and replacing them with low wage earners and those who produce the least. De Blasio meant when he said "there's plenty of money out there--it's just in the wrong hands."
The money is indeed in the wrong hands. the entire problem with the current system is that absentee billionaires are paying the least while we working stiffs pay the most.
@Jay You vote for socialists you get socialism!!!
Great care should be taken to not tax homeowners out of their homes. Pegging the tax amount to the value of the home is grossly unfair as that price is what some other person is willing to spend on it and has no connection to the actual homeowner’s finances. California came up with a system in 1978 so that when a home is actually sold, that sale price is used to calculate the new tax (1% of assessed value) but that tax rate can only be raised a maximum of 2% per year unless significant modification to the home is performed. That guarantees the owner a quite stable tax bill so they can properly budget. The actual tax bills for similar homes is completely dependent on when they were purchased and could vary tremendously but the rate is both calculable and stable. A tax rate at the whim of politicians or the artificial price set by real estate agents is grossly unfair. Investigate “CA Prop 13” for details.
The only fair system is every property owner pays taxes based on the fair market value of their property, including condos and coops. Personal exemptions for say, seniors with limited income, are okay. Everything else is a distortion that benefits some and punishes others. Higher rates on commercial property are okay.
The so-called market value of my house is based on neighborhood houses 3-4 times the square footage of my house, on much larger plots and with garages. And I can't seem to fight it.
Have you attempted to protest your valuation?
I've noticed that Brooklyn homes comparable to mine, pay thousands less in taxes. In fact, De Blasio's house is valued at thousands more than mine, yet his taxes are thousands less. ALL middle class homeowners in NYC should have their taxes reduced to the level of Brooklyn and Manhattan.. NO MORE FREE RIDE.
In New Jersey we have property revaluations every few years. Sure, we fight about our own valuations and sometimes we get adjustments. Then the tax bill is spread over all of the properties and each property owner pays his share based on the value of the property. We are all used to this. It seems like New York City needs to catch up with us. Property taxes should not be based on annual income except for obvious low-income situations and this is addressed by rebates and low-income housing. It will be interesting to see the arguments against this proposal. It doesn't seem like they would be able to hold any water.
Mr. Griffin's purchase received more media attention than any transaction in history and served as a springboard for NYC to increase mansion and state tax. The market took notice and absorbed it. The market will not and cannot absorb a sweeping overhaul like this. Mr. Goldstein's comments about "a mass exodus" are ignorant and arrogant. It is already happening. Inventory is nearing peak levels even though interest rates are at all-time lows. The tax overhaul coupled with Salazar's "good cause eviction" bill are absurd on so many levels.
We purchased our home for a fraction of its current value. We were able to do so with the help of an fha loan and the benefit of low property taxes. Our current home value is not money we have on hand. It’s equity, but not liquid cash we have access to. We are not rich. When 20 years from now we must sell to afford to be able to retire, we will be taxed heavily on the sale. Taxing exorbitantly based on exaggerated market values will force middle class and lower income home owners out of their homes. Basically, this tells us all, homeownership is only for the wealthy in nyc.
As the President of a 45 unit coop in Park Slope I am acutely aware of the effects on the budget of skyrocketing appraised values that lead to higher real estate taxes. While recent purchasers may have big incomes with good upside potential the increases are also imposed on tenant shareholders who have often lived in their unit for years and even decades. Some are retired and living on a fixed income. Some are living in an apartment that was easily affordable for them just a few years ago but the maintenance has increased dramatically, driven largely by tax increases and stretching their budget. More of the same will only serve to force middle and upper middle class owners to sell to more affluent buyers - exacerbating the problem the city is trying to solve. If you must tax them, tax them on real profits when they sell. Large taxes on unrealized gains is not the answer.
This proposal will punish middle class people who have spent their entire lives working and living in the same community for decades. I'm all for the pied e terre tax for those very wealthy who are not primary residents of their units. However, this completely misguided proposal will harm the middle class who make up the backbone of their community. It will further serve to stratify the increasing gap between the very wealthy and the poor in this city, while pushing out those New Yorkers who are the glue and fabric of their communities, buildings and neighborhoods. Please do not let this pass.
Please consider this scenario. If someone purchased a coop in the Village in 1980 for $200,000 and spent this entire time living in the same unit, working at a middle class job. The value of their coop has skyrocketed because of the location and is now assessed at a million dollars. How is this person supposed to be able to afford taxes on a million dollar apartment? They will be forced to sell someone who is rich enough to afford a million dollar apartment. This person who has spent practically their entire life in the same apartment, building and neighborhood will be forced to move out of the building and the community they have lived in for decades.
YES!!! Let's tax the rich more!! Then they can leave for Florida. and the city's other revenues can plummet. Great idea. We can also chase all corporations out of NYC and everyone can move to Austin or Oklahoma. Does anyone remember 1981? Because I do.
I own a small (912 sf) 1-family house on SI and my property taxes for next year will be $5900. Many NYC renters are under the delusion that Property Tax Reform will lower their rents because of lower property taxes on Class-2 (Apartments, Condos, Coops) properties. I don’t think so. If anything Class-2 properties should be taxed at a higher rate than Class-1 (1,2,3 family homes). The average class-2 property contains 8 residential units and on average in 12 stories tall. Sounds like an income generating business better able to absorb tax increases, and should be taxed like a business with higher taxes phased in over 10 years. The average class-1 property contains 1.5 residential units and on average is two stories tall. The rental income is tiny compared to class-2. 70% of the residential units in NYC are in class-2 properties. The bigger problem is that there appears to be no way to reform the system without causing more problems, particularly in the 1,2,3 family home real estate market. Trusting deBlasio with this is asking for trouble. His administration has already started to wage war on 1,2,3 family homeowners with ‘green’ proposals that will only increase the cost of new homes, making suburban homes more financially attractive. The whole situation is just a huge mess… NYC tax class-1 and tax class-2, from nyc public databases - http://pc.cd/orJ
This smells like a conspiracy. A lot of people will have to sell their houses. Developers and the real estate industry will make a killing just to punish a few people that have been owning their houses for decades and therefore their property taxes are low. Why don’t they go after the ridiculous tax abatements. Billion s of dollars in tax revenue are wasted to the benefit of developers with no benefit to our citizens.
I hadn't thought of that. Even if you're right (possible), it will be a one time windfall followed by a drop in transactions when those who can afford their new tax bills stay in place and try to ride out lower real estate values. The recent rent reforms have diminished activity and thus all of the transaction taxes that the city and state have become accustomed to. It's not healthy to be so dependent on this industry, but like most broken things in NY the legislators have pinned themselves into this corner. Every time they come up with a new way to create a "fairer" system, they end up having to go back to the piggy bank (taxpayers) to come up with another way to plug the leaky dam. As other commenters have pointed out, interest groups and unions more collectively are given a pass and get to look the other way when it comes time to come up with creative ways to stop burning so much public money. The end result is usually feel good political actions followed by real world problems for individuals. In the case of rent reforms, small building owners are having the hardest time adjusting. And in a decade or two down the line, rent control tenants in decrepit buildings that their owners cant afford to fix will be the next victims. In the case of tax reform, there do actually stand to be some individual winners until the city realizes it needs new revenue streams due to a decrease in transactions activity. Net neutral only in their dreams!
Let me understand this: Saving long and hard to buy a home within NYC is something that should be punished by taxing people to death? As my good friend would say: Do good, just not too good. You all are making it near impossible to be a Democrat in this City.
"For many years, owners of multimillion dollar residences in places like Park Slope, Brooklyn, have paid less in property taxes than lower-valued homes in other parts of the city" You think this came about by accident? No. It shows how the Ultra Rich control local politics where it counts . Taxes For an example how they control National politics read https://www.nytimes.com/2007/07/30/washington/30schumer.html
Let's scare away all of the decent people from New York City by taxing the heck out of them. Bring back the Lindsay and Koch days.
Start by limiting overtime for City employees to emergency situations. Private industry rarely allows overtime. The City should be on a much tighter budget. If the City fails to keep the lid on overtime, only the rich can ever retire in New York City. Taxing in proportion to fair market value is a good goal, but fleeces homeowners if the City is overspending.
Taxes across the country would be slashed if we returned to the draft and included most civil service jobs under its conscription. Draftees can be paid a small stipend versus the salaries we allow those who work for us to extort from hapless politicians.
It looks like the proposal would value coops individually and not a whole building as under the current system. Right now long time coop owners potentially pay taxes on the renovations of rich new buyers in the building. One problem is valuing properties every year. Our coop’s property taxes have increased at more than twice the cost of living over the last 35 years under this system. The proprietary algorithm spits out tax increases at a much higher rate than our property value has increased. The coop has increased in value by 1.37 times the cost of living. So our coop’s property taxes as a percentage of market value have been skyrocketing each year due to a Vegas-style algorithm where the house always takes the lions share of the money. It is not clear revaluation will fix this if the City’s taxes on the whole have gone up by a factor of two thirds of market values in the last 40 years due to out of control spending by the City. The next mayor ought to be running on a platform of no wasteful spending.
Coop ownership represents not the real property but the share of the corporation that the unit represents. That and the fact that cops are generally formed from former rental properties is the basis for that method of taxing.
The rest of the country is typically fine paying very high property taxes based on periodic market assessments without caps if the public school the home is zoned for is very good. One issue in NYC is that the public school system isn’t great. And often you can have an apartment that has sky rocketed in value but sits in a bad public school zone. It would be hard for families to justify paying the higher tax rate on a property that has risen in value but had been protected by the old system’s tax cap if there’s not an excellent public school. Those are the property prices that would decline dramatically. Something to think about if this passes.
There must be some adjustment to make taxing fairer, but a very radical change will hurt the middle class even more than the rich. This must be apptoached incrementally and with great thought. No problem taxing the ultra rich with 10 million dollar apartments, but the working guy living in a decent neighborhood: be careful.
The assessor should publish enough detail on each unit so that other owners and appraisers can compare them with market sales and all properties should be assessed at full market value. In other places, property owners apply for readjustments down from the valuation so that it is accurate. They say property x has an amenity that mine does not and therefore my property should be assessed for less. Then the amount to be raised from property taxes, X, is divided by the total valuation, Y, and all properties pay x/y annual tax. Since NYC has an income tax, it can use that to adjust rates to help people with lower incomes. It could say that there will be no city income tax below $50,000 -$100,000 per person. If you adjust property taxes based on who lives in a building, you are inviting fraud.
Will this not simply force out low income people who own their apartments in gentrifying neighborhoods? The market value of a property may be high, but the last few residents who don't want to move should not be forced out due to ridiculously high property taxes. That seems to only punish the poor.
Many people bought homes decades ago in places all over Brooklyn not as an investment but because they needed a place to live. And yes, they are often sitting on gains (that will be taxed upon sale) that make them look rich to others. I know of teachers, police officers, physical therapists, architects and artists all in this situation. The additional income to pay huge new tax bills doesn’t suddenly appear just because your neighborhood got “hot” in the last few years.
This will be fun to watch. Money does not appear like manna so people that think they are middle class will be viewed as "rich" by those wanting them to pay their "fair share". Taxes are good as long as someone else pays, which explains the exodus of people from NY and California to low or no tax states. I'm still trying to figure out why our progressive mayor and even more (if that's possible) progressive city council never think of spending less. I guess that's too challenging.
"After an investigation revealed abuses at a shop in Manhattan, support for a bill to ban retail sales of dogs, cats and rabbits." Better that the City Council try to investigate fraud and waste in city agencies so that they do not have to go after middle-class homeowners. Soft targets -- the City Council excels in Dilly exercises. Inspect pet stores, don't ban them. Regulate horse-drawn carriages -- don't ban them. And for heaven's sake, start a pro-birth control campaign so that fewer children are brought up unmannered, undereducated, and dependent on low-income housing, subsidies, and middle-class taxes for their survival.
So, if you are retired but have lived in your home for decades (t BTW, a home NO ONE wanted 45 years ago because people were fleeing Brooklyn and NY at the time), and have built up your community by improving your home, encouraging and helping your neighbors with their home-fix ups, improved your entire community working through your volunteer association to make sure local businesses were patronized , helped with traffic calming, and even participated in neighborhood watches at night to keep everything safe...and the market value increases because of this work over decades - you are to be penalized with more taxes in your retirement (so much so that you will have to move)? That is fair? Older people should be allowed to live in their own homes, at reliable and reasonable tax levels, until they die. To "adjust" now is patently unfair and will throw a whole lot of people, in their remaining, last years, into terrible turmoil. Fair? Huh?