How Come Multimillion Dollar Homes Have Such Low Taxes ...

[I_Love_LI_but]

Originally Posted by AlexisT

I'm saying it's rational, not necessarily desirable. Behavior can be economically rational (i.e. a rational response to given conditions) without being desirable for society as a whole. It's pretty basic math. It can be fixed, but only by merging districts to even out these discrepancies and distortions, or by forcing wealthy areas to subsidize less-affluent areas in some other way. Otherwise, you're just asking districts to raise more money than they need in the name of "fairness", and while I'm all for fairness, it should have a point.

In your haste to discredit my point of view, I don't think you are taking the time to understand what's going on in my posts before answering them.

I am only talking about 1 school district in my example: Glen Cove. I purposely used homes in Glen Cove because it is one school district and not comparing across different school districts. Where are you getting this stuff about "forcing wealthy areas to subsidize less-affluent areas" when they belong to the same school district?

The average person in the $260,000 house pays $5,678, or 2.14%
The multimillionaire in the $3,275,000 estate pays $35,822 or 1.09%

ONCE AGAIN, BOTH HOMES ARE IN THE SAME SCHOOL DISTRICT.

Sorry, but I don't consider that "rational." I consider that to be gravy for the rich and the middle class bearing the bulk of the weight. Glen Cove should use "simple math" and come up with something in the middle that raises the same amount of money that they need, yet keeps the proportions similar instead of making the poorer person pay over 1% more than the wealthy one. I think there would be "a point" to that, don't you?

As for the other point you are making, yes, I agree the consolidation of several school districts on Long Island would make a tremendous difference just by cutting out the duplication over and over again in each little school district fiefdom of pampered and high paid administrators. It would also cut white collar crime in school districts since there would be more oversight and less people left with a lot of power and nobody to oversee what they are up to. Like stealing money hand over fist in Roslyn and other districts. Like falsifying records to give lawyers who are not employees, but who actually work for firms that the school districts contract with for legal services, free benefits for life and multiple cushy pensions on the taxpayer dollar. Those cons would be a lot harder to get away with when there is some oversight.

[AlexisT]

Well, first, I mis-read and thought you were talking about different districts. Sorry. However, I pointed out the flaw in your argument earlier: you don't actually have the assessments and MLS asking prices are completely unreliable, so you can't use them to calculate rates of tax. You haven't actually demonstrated that rich people are paying a lower rate of tax, and I don't think you can, because every school budget I've ever seen states a flat rate of tax relative to assessment ($X of tax per $100 of assessed value). When I pointed that out earlier, you switched to a "but the assessment process is flawed" argument (i.e. claiming that people pay an effective lower rate of tax because their houses are unfairly assessed as having a lower value than they have), which is an entirely different one--and you haven't presented evidence to prove that. Your argument boiled down to, "people successfully grieve their taxes, so they must know it's flawed".

I believe that the property tax system on LI is flawed, but I don't think you've made a case for the particular accusations you've leveled at it.

[I_Love_LI_but]

Originally Posted by AlexisT

Well, first, I mis-read and thought you were talking about different districts. Sorry. However, I pointed out the flaw in your argument earlier: you don't actually have the assessments and MLS asking prices are completely unreliable, so you can't use them to calculate rates of tax. You haven't actually demonstrated that rich people are paying a lower rate of tax, and I don't think you can, because every school budget I've ever seen states a flat rate of tax relative to assessment ($X of tax per $100 of assessed value). When I pointed that out earlier, you switched to a "but the assessment process is flawed" argument (i.e. claiming that people pay an effective lower rate of tax because their houses are unfairly assessed as having a lower value than they have), which is an entirely different one--and you haven't presented evidence to prove that. Your argument boiled down to, "people successfully grieve their taxes, so they must know it's flawed".

I believe that the property tax system on LI is flawed, but I don't think you've made a case for the particular accusations you've leveled at it.

With all due respect, I don't see much support for your point of view on here.

As for your protest of the MLS prices I am using, that's just plain nitpicking. I am sure they are not so drastically off what the assessed value has been as to affect it enough to negate my results showing the most expensive home pays a lower percentage rate of taxes than the lowest cost home.

The assessment process has too much wiggle room for those who know what they are doing and know who to hire to make sure it is in their favor. That is what skews the percentages towards wealthy paying lower ones and middle class paying higher ones. It also effectively negates what you consider a fair "flat tax" rate. If it as simple as you claim ($X of tax per $100 of assessed value), then why the difference in the percentage at all? The very expensive home should pay the same percentage as the very inexpensive home. Well, it doesn't. It pays a much lower percentage.

Would it make you happy if I found out the EXACT assessed value of the normal home in Glen Cove and the multimillionaire's one and did the comparison that way?

There are too many people who dream of someday being rich via the lottery, becoming famous, or a fantastic invention and who tacitly approve of the tax breaks that the wealthy get because they hope to take advantage of the same tax breaks some day. There are a lot of middle class dreamers out there who think this way and do not protest the unfair burden on the middle class. It's sad because 99.9% of them will go through their middle class life paying the maximum taxes and never becoming rich enough to get any meaningful tax breaks, all the while protecting the rights of the wealthy to take full advantage of them.

PS: If you insist on holding ME to such high standards of research, calculation, and total 100% accuracy, where is the proof of YOUR POINT OF VIEW, that the system is NOT skewed in favor of the wealthy? All you write is your opinion, not anything that proves your opinion is the correct one.

[sean sean sean sean]

Originally Posted by I_Love_LI_but

Perhaps there is nothing specifically written into any property tax code that goes like this, "Homes affordable to the rich will be taxed at a lower rate than those affordable to the middle class," BUT, nonetheless, if you look at the cold hard facts and numbers, many luxury homes (with the added advantage of actual acreage rather than "lots") ARE taxed at a lower rate when compared dollar for dollar on property value (or asking price).

Example: Glen Cove
I chose Glen Cove because it runs the gamut of income levels, very high to very low. I obtained my data from MLSLI.com – Long Island Real Estate – Find A Home in Nassau, Suffolk & Queens.

OK, I looked these properties up....Adjusted Market Value is the number assigned by the County Assessor that property taxes are calculated off of. I can't get official tax data off this website, so I'll have to trust what is listed on MLSLI - Glen Cove residents pay the majority of their taxes to the city itself (which includes schools) so only the County portion of the taxes are listed on here.

12 Stanco Street
Asking Price: $265,000
Adjusted Market Value (2009): $394,000
Property taxes: $5,678
Proportion of taxes to AMV: 1.44%

8 East Avenue
Asking Price: $365,000
Adjusted Market Value (2009): $463,400
Property Taxes: $7,270
Proportion of taxes to AMV: 1.57%

31 Craft Avenue
Asking Price: $575,000
Adjusted Market Value (2009): $571,200
Property Taxes: $9,200
Proportion of taxes to AMV: 1.61%

2 Danas Island Road (I'm not 100% sure about this one)
Asking price: $1,149,000
Adjusted Market Value (2009): $1,302,000
Property taxes: $19,000
Proportion of taxes to AMV: 1.46%

2 Pondview Drive
Asking price: $2,250,000
Adjusted Market Value (2009): $2,233,200
Property taxes: $30,000
Proportion of taxes to AMV: 1.34%

17 Hollow Way
Asking price: $3,275,000
Adjusted Market Value (2009): $2,957,200
Property taxes: $35,822
Proportion of taxes to AMV: 1.21%

BTW the cheapest house also had a senior abatement, so their tax rate would likely be higher in the real world. This doesn't make any sense....maybe it's just a Glen Cove thing, because the County taxes are equal across the board.

[I_Love_LI_but]

Originally Posted by sean sean sean sean

OK, I looked these properties up....Adjusted Market Value is the number assigned by the County Assessor that property taxes are calculated off of. I can't get official tax data off this website, so I'll have to trust what is listed on MLSLI - Glen Cove residents pay the majority of their taxes to the city itself (which includes schools) so only the County portion of the taxes are listed on here.

12 Stanco Street
Asking Price: $265,000
Adjusted Market Value (2009): $394,000
Property taxes: $5,678
Proportion of taxes to AMV: 1.44%

8 East Avenue
Asking Price: $365,000
Adjusted Market Value (2009): $463,400
Property Taxes: $7,270
Proportion of taxes to AMV: 1.57%

31 Craft Avenue
Asking Price: $575,000
Adjusted Market Value (2009): $571,200
Property Taxes: $9,200
Proportion of taxes to AMV: 1.61%

2 Danas Island Road (I'm not 100% sure about this one)
Asking price: $1,149,000
Adjusted Market Value (2009): $1,302,000
Property taxes: $19,000
Proportion of taxes to AMV: 1.46%

2 Pondview Drive
Asking price: $2,250,000
Adjusted Market Value (2009): $2,233,200
Property taxes: $30,000
Proportion of taxes to AMV: 1.34%

17 Hollow Way
Asking price: $3,275,000
Adjusted Market Value (2009): $2,957,200
Property taxes: $35,822
Proportion of taxes to AMV: 1.21%

BTW the cheapest house also had a senior abatement, so their tax rate would likely be higher in the real world. This doesn't make any sense....maybe it's just a Glen Cove thing, because the County taxes are equal across the board.

TY, seanx4, for taking the time to do this research and posting it here. Rep point for you!

One thing I wonder is if the property tax figure on MLSLI represents 2009 or a previous year. Maybe a Realtor can chime in with how that figure is obtained for MLSLI listings?

As for City tax in Glen Cove, that is yet something else to consider! On LI many areas have smaller municipality taxes for Cities, Villages, etc., and sometimes they are listed on MLSLI along with the County tax, but I don't know how consistently. (For example, where I live there is a Village tax, but it is low compared to the main property taxes.)

[sean sean sean sean]

Originally Posted by I_Love_LI_but

TY, seanx4, for taking the time to do this research and posting it here. Rep point for you!

One thing I wonder is if the property tax figure on MLSLI represents 2009 or a previous year. Maybe a Realtor can chime in with how that figure is obtained for MLSLI listings?

As for City tax in Glen Cove, that is yet something else to consider! On LI many areas have smaller municipality taxes for Cities, Villages, etc., and sometimes they are listed on MLSLI along with the County tax, but I don't know how consistently. (For example, where I live there is a Village tax, but it is low compared to the main property taxes.)

Very likely that it could be from '08, the '09 County assessments only came out a week ago, I dunno if GC city tax is on the same schedule.

Sometimes I see the village taxes listed, sometimes I don't....I think they're also included in the total occasionally. Listings on there don't really seem to adhere to one unified format. The village tax is almost always going to be significantly lower because 99% of the villages in NY State only provide a small number of services. For instance, in Garden City the village handles trash pickup instead of the Town of Hempstead - so instead of paying that tax as a portion of the County/Town property taxes it becomes a part of your village tax bill. A lot of villages don't provide any real services except a board of trustees to oversee building regulations and zoning ordinances and stuff, so you're really only paying their salary (places like Lattingtown, Mill Neck, etc.)

In Glen Cove, there isn't any Town or Village layer of government....it's just a subset of the County - so basically every function is handled at the City level. To figure out why these multi-million dollar homes are taxed at a lower rate, we'd have to find out why the Level of Assessment for the City is somehow different for the fixed rate of the County....

Maybe I'll check with an unincorporated area in the same school district and see if I get the same results.

[OhBeeHave]

Originally Posted by Jamie1453

This is a great topic. I was wondering the same thing as searching various homes on MLSLI. This did not make sense to me
MLSLI # 2079396 Old Field 1.45 acres 1,399,000 12,000 taxes
MLSLI# 2143630 HEad of Harbor 2.21 acres 799,000 12,725 taxes
MLSLI # 2131655 Head of Harbor 2.05 acres 925,000 14,439 taxes

I was outraged when realizing that if we were to purchase a home with significantly less land and lower quality school district, we would be paying very similar taxes!

I just reread this thread since I_Love_LI_but was kind enough to link it.

The first listing sounded familiar last time around, but I didn't look into it. A few moments ago, I fished it back up on the mls. (The new mls # 2175957) I had looked at this house 2+ years or so ago when it was a $799K handyman special in desperate condition. The property was long and narrow, making it even less desirable. At that time the taxes were $12K and the village taxes were listed as more than $600. They were closer to $1,200.

The person who bought it to flip put a lot of money into it at the wrong time. Not only did he clean it up, he added another floor to the house. He has now dropped his asking price to 1,199,900. Who knows what the taxes will actually be when the sale is finally made -- I would wager that the permit is still open.

Many of us here would balk at $13K taxes on an $799K POS, but howl at the thought of a $13K $1.1 mil.

[TeamExit]

Originally Posted by OhBeeHave

Many of us here would balk at $13K taxes on an $799K POS, but howl at the thought of a $13K $1.1 mil.

and its just rediculous that my taxes are half of that at $6400, on my house i just bought for $221k on .12 acre....