How Come Multimillion Dollar Homes Have Such Low Taxes ... (Southampton: real estate, how much)

[I_Love_LI_but]

... while the rest of us here on Long Island (the middle class) are gouged beyond belief?

The deck seems to be perpetually unfairly stacked in favor of the super-rich, who can well afford taxes of much more than $11,275 a year on a $6.5 million home.

Case in point:

Lydia Bach has sold her home on First Neck Lane in Southampton for $6.5 million, records show.

Public records show that the home sits on .72 acres. Property taxes are $11,275 a year. The Victorian home has 10 bedrooms and six baths, a grand reception hall and a formal dining room.

If you go on MLSLI.com – Long Island Real Estate – Find A Home in Nassau, Suffolk & Queens, you will find such tax bargains as:

Amaganset, price $899,000, annual taxes $4,285
Amaganset, price $1,195,000, annual taxes $3,912
Amaganset, price $1,795,000, annual taxes $3,000
Amaganset, price $2,995,000, annual taxes $1,255
Bridgehampton, price $1,250,000, annual taxes $3,748
Bridgehampton, price $2,385,000, annual taxes $10,481
Bridgehampton, price $2,775,000, annual taxes $4,950
Bridgehampton, price $4,900,000, annual taxes $10,238
Bridgehampton, price $5,000,000, annual taxes $6,677

I don't even want to go further down the alphabet because it's making me sick!

How do they get away with such super low taxes while the rest of us, the mere mortals a/k/a "the little people," are bled to death by property taxes that threaten to or have forced many of us out of our homes? The rich never pay their fair share as usual.

Even when taxes on luxury priced homes look "high" compared to what middle class priced homes are taxed at, it is still a way underpriced bargain for the rich. If you can afford to buy a home in East Hampton for $5,195,000, annual taxes of $24,940 are mere pocket change. If you can afford to buy an estate in Glen Cove on 5.13 acres for $3,275,000, annual taxes of $35,822 are a joke (on the other taxpayers of course).

[Crookhaven]

Originally Posted by I_Love_LI_but

... while the rest of us here on Long Island (the middle class) are gouged beyond belief?

The deck seems to be perpetually unfairly stacked in favor of the super-rich, who can well afford taxes of much more than $11,275 a year on a $6.5 million home.

Case in point:

Lydia Bach has sold her home on First Neck Lane in Southampton for $6.5 million, records show.

Public records show that the home sits on .72 acres. Property taxes are $11,275 a year. The Victorian home has 10 bedrooms and six baths, a grand reception hall and a formal dining room.

If you go on MLSLI.com – Long Island Real Estate – Find A Home in Nassau, Suffolk & Queens, you will find such tax bargains as:

Amaganset, price $899,000, annual taxes $4,285
Amaganset, price $1,195,000, annual taxes $3,912
Amaganset, price $1,795,000, annual taxes $3,000
Amaganset, price $2,995,000, annual taxes $1,255
Bridgehampton, price $1,250,000, annual taxes $3,748
Bridgehampton, price $2,385,000, annual taxes $10,481
Bridgehampton, price $2,775,000, annual taxes $4,950
Bridgehampton, price $4,900,000, annual taxes $10,238
Bridgehampton, price $5,000,000, annual taxes $6,677

I don't even want to go further down the alphabet because it's making me sick!

How do they get away with such super low taxes while the rest of us, the mere mortals a/k/a "the little people," are bled to death by property taxes that threaten to or have forced many of us out of our homes? The rich never pay their fair share as usual.

Even when taxes on luxury priced homes look "high" compared to what middle class priced homes are taxed at, it is still a way underpriced bargain for the rich. If you can afford to buy a home in East Hampton for $5,195,000, annual taxes of $24,940 are mere pocket change. If you can afford to buy an estate in Glen Cove on 5.13 acres for $3,275,000, annual taxes of $35,822 are a joke (on the other taxpayers of course).

"You must pay a lot of taxes". She said : "We don't pay taxes. Only the little people pay taxes."
http://en.wikipedia.org/wiki/Leona_Helmsley

Biggest sin in Suffolk County...possibly in NY.

I can believe how much money Levy leaves in the table out there.
I dont wanna hear anything about the schools....theyre spending like 45k a student in Amagansett.

Its wrong...theyre shouldnt be a 7 figure house out there with taxes UNDER 20k.

crooks

[AlexisT]

It's the economics of the district, no more, no less. Southampton has a lot of very expensive real estate, but no one who owns those houses is sending their kids to school. They need a lower rate to achieve the necessary total of money.

If you look on MLS for Southampton SD, you'll see that taxes on smaller houses are proportionately lower as well--I can see $600K houses on small lots with taxes of $2K. In eastern Nassau those houses would have $9K taxes. There's also one $38M estate with taxes of $44K, which shows that it's the basic rate of tax that's doing this.

We could all have taxes like that... if we kicked out all the kids. This isn't about a "break for the rich"; it's the economics of second-home areas.

[nbres]

This is exactly why I keep advocating for a repeal of the annual property tax and its replacement with a progressive income tax.

A progressive income tax would be much fairer than our current regressive property tax system that punishes most of us (working-middle class folk) with insanely high property taxes and yet gives the wealthy a freebie.

Forget about the income tax deduction you get - how about a 100% property tax elimination.

[DeadPool1998]

Originally Posted by Crookhaven

"You must pay a lot of taxes". She said : "We don't pay taxes. Only the little people pay taxes."
Leona Helmsley - Wikipedia, the free encyclopedia

Biggest sin in Suffolk County...possibly in NY.

I can believe how much money Levy leaves in the table out there.
I dont wanna hear anything about the schools....theyre spending like 45k a student in Amagansett.

Its wrong...theyre shouldnt be a 7 figure house out there with taxes UNDER 20k.

crooks

This is complete at total BS. I had no idea that this was going on. Three Cheers to the person who did the research and SHAME on the politicians who are doing the bidding of the rich. This is moral immoral than unfair.

[DeadPool1998]

Originally Posted by nbres

This is exactly why I keep advocating for a repeal of the annual property tax and its replacement with a progressive income tax.

A progressive income tax would be much fairer than our current regressive property tax system that punishes most of us (working-middle class folk) with insanely high property taxes and yet gives the wealthy a freebie.

Forget about the income tax deduction you get - how about a 100% property tax elimination.

What about the existence of a property tax necessitates the screwing of the middle class? Nothing. Just do it fairly!

Progressive income taxes don't dispense with the lack of fairness. It's still millionaires writing the tax code and creating the shelters.

[AlexisT]

However, in this case, it's not a quirk of the tax code, because it would appear that the rich aren't paying a lower rate: cheaper houses also have low taxes. The problem in this case is the basis of the tax system. Because LI districts are small, issues like second home ownership or a wealthy tax base have a distortionary effect. Districts like Levittown or Roosevelt with lower property values and little commercial property have to have a much higher rate than wealthy districts.

Property taxes hit the property-rich and income-poor disproportionately hard (retirees for example); an income tax would be an improvement for them. However, the LI system is the worst of all because of the small districts. Poor districts have a much higher rate of taxation and still have less money than wealthy districts. The worst distortions could be smoothed out through consolidation. However, that won't happen, because (as a recent NYT article pointed out) some people would be losers, and they'll never agree to it.

[I_Love_LI_but]

Originally Posted by nbres

This is exactly why I keep advocating for a repeal of the annual property tax and its replacement with a progressive income tax.

A progressive income tax would be much fairer than our current regressive property tax system that punishes most of us (working-middle class folk) with insanely high property taxes and yet gives the wealthy a freebie.

Forget about the income tax deduction you get - how about a 100% property tax elimination.

What scares me is that they will never eliminate the property tax, just "lower" it (temporarily) and add on an income tax. Also, relying on income tax rather than the locality of property owned will allow a lot of people to weasel out of paying their fair share by being "official residents" of wherever the taxes are the lowest. (Just take a look at all the corporations based in Bermuda as a home office when they only have a post office box there for weaseling out possibilities. When it comes to tax shelters, business or personal, there are hordes of lawyers and accountants working overtime every single day to make sure the privileged few in this New Gilded Age do not pay their fair share.)

As for the assertion that these homes have lower taxes because there are mainly vacation homes in the area, yeah I understand that, but even when you are spending millions for an estate on 5+ acres in Glen Cove, which has a sizeable school district, as my OP illustrated, it is still proportionately quite a bargain compared to what the middle class has to pay. In many places property tax is actually determined on the value of the property without all the smoke and mirrors in our local systems.

Like crooks, I also believe that multimillion dollar homes should be taxed much more, second or vacation home or not. Perhaps there should be a real estate luxury tax and if the money collected is too much for the local school district it could go into a fund to help other school districts or offset the cuts in STAR that have been proposed for the "little people." I doubt very much the Hamptons would close down!

[AlexisT]

Well, that's another argument, that property tax should have a progressive element or that there should be a luxury tax. I'm just arguing against the idea that the taxes were specifically structured to give rich homeowners a break. It's just another distortionary effect, and LI has plenty of other examples.

[Fallingwater79]

And in upstate NY, I pay $6100/year on a $240,000 house (and dropping )....is it any wonder Upstate is emptying out quicker than a sinking ship? Let's see if the Gov. can remedy this mess before there are no middle class left in the state