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My thread is about tax class 1 used for private houses. Your link is for class 2 rental and coops/condos properties which must have its own and different issues.
As far as class 1 properties, I don’t think the property valuations are the problem so much as are the assessed values. For example, my childhood home is valued at $782,000 with an assessed value of $27,000. Typical homes where I live now are valued at around $700,000 with an assessed value of $38,000. The assessed value less any exemptions is multiplied by the city property tax rate so net taxes are much higher in my current neighborhood despite having a lower market value than some higher priced homes elsewhere in NYC. That is ultimately unfair.
isnt there a max assessment value of 6% on market value of the home? so in the case of the 700,000 the max assessment is $42,000.
for the 782,000 home, it would be 46,920. and with a limit of 20% assessment increase per 5 year period, it will be about 15 years until the max assessment is reached (assuming market price stays flat)
My thread is about tax class 1 used for private houses. Your link is for class 2 rental and coops/condos properties which must have its own and different issues.
As far as class 1 properties, I don’t think the property valuations are the problem so much as are the assessed values. For example, my childhood home is valued at $782,000 with an assessed value of $27,000. Typical homes where I live now are valued at around $700,000 with an assessed value of $38,000. The assessed value less any exemptions is multiplied by the city property tax rate so net taxes are much higher in my current neighborhood despite having a lower market value than some higher priced homes elsewhere in NYC. That is ultimately unfair.
isnt there a max assessment value of 6% on market value of the home? so in the case of the 700,000 the max assessment is $42,000. if the market price stays flat, the property taxes should taper off to flat once max assessment is reached
for the 782,000 home, it would be 46,920. and with a limit of 20% assessment increase per 5 year period, it will be about 15 years until the max assessment is reached (again assuming market price stays flat)
at the end of the day the 782k home property taxes will catch up and exceeed that of the 700k home.
this could be because the 700k home market value shot up faster and earlier while the 782k home maybe slowly rose and only recently climbed up to that value. also i think the more times a house is bought and sold, the assessed value might climb faster.
isnt there a max assessment value of 6% on market value of the home? so in the case of the 700,000 the max assessment is $42,000. if the market price stays flat, the property taxes should taper off to flat once max assessment is reached
for the 782,000 home, it would be 46,920. and with a limit of 20% assessment increase per 5 year period, it will be about 15 years until the max assessment is reached (again assuming market price stays flat)
at the end of the day the 782k home property taxes will catch up and exceeed that of the 700k home.
this could be because the 700k home market value shot up faster and earlier while the 782k home maybe slowly rose and only recently climbed up to that value. also i think the more times a house is bought and sold, the assessed value might climb faster.
The $700k home in my example is assessed about 5.4% of market value while the $782k home in another neighborhood is assessed about 3.5% of market value. If the “end of the day” when taxes on the more valuable home catches up and exceeds the lesser value home is 15 years, that’s still 15 years of paying a lot more tax on a less expensive home and that is fundamentally unfair. (Assuming they don’t change the assessment rules in 15 years.) Imagine if a person earning a million dollars a year had a city income tax rate of 3.5% while a person earning $100,000 or less was taxed at 5.4%. Would anyone think that was fair for 15 or more years?
The $700k home in my example is assessed about 5.4% of market value while the $782k home in another neighborhood is assessed about 3.5% of market value. If the “end of the day” when taxes on the more valuable home catches up and exceeds the lesser value home is 15 years, that’s still 15 years of paying a lot more tax on a less expensive home and that is fundamentally unfair. (Assuming they don’t change the assessment rules in 15 years.) Imagine if a person earning a million dollars a year had a city income tax rate of 3.5% while a person earning $100,000 or less was taxed at 5.4%. Would anyone think that was fair for 15 or more years?
by law the assessed value cant go up more than 6%/year or 20% in a 5 year period.
That tells me several possibilities why the 700k home assessed value currently exceeds that of the 782k home:
A) 700k home value rose earlier and faster than the 782k home. could it have been in a more long established desirable location, while the other was in a less desirable location (and maybe only recently gentrified thus jacking up market value only recently). Think douglaston vs Jamaica
B) An exception to the 20%/5 year assessment increase limit...if the 700k home had a renovation and city knows about it, they can jack up the assessments much higher.
C) if the house was sold , reassessed at higher value
The assessed calc is pretty formulaic. i can see on my tax history, that it goes up 20% every 5 years. people in northeast queens are ahead of me in taxes even though we both currently live in 800k homes because northeast queens home values were always ahead of my area, but now my area has caught up to them
isnt there a max assessment value of 6% on market value of the home? so in the case of the 700,000 the max assessment is $42,000.
for the 782,000 home, it would be 46,920. and with a limit of 20% assessment increase per 5 year period, it will be about 15 years until the max assessment is reached (assuming market price stays flat)
On another note reason why no one in city or state government has balls to tackle NYC property tax reform is clear, no matter which way things are sliced the most protected group (single to three family homes) would take some sort of hit. Some might pay less after reform, others more, but never the less apple cart would be turned over.
by law the assessed value cant go up more than 6%/year or 20% in a 5 year period.
That tells me several possibilities why the 700k home assessed value currently exceeds that of the 782k home:
A) 700k home value rose earlier and faster than the 782k home. could it have been in a more long established desirable location, while the other was in a less desirable location (and maybe only recently gentrified thus jacking up market value only recently). Think douglaston vs Jamaica
It’s most likely that the $782k home rose in value very fast and benefited from the limits on how much assessed value could increase each year and every five years. The lower valued home with substantially higher property taxes had a more gradual increase in value and had steady increases in assessed value over a much longer period. If a home doubled in value over five years, the assessed value could only go up 20%. A lower valued home which had modest increases in value could also go up 20% in assessed value despite not having anywhere near 100% appreciation in five years. Bottom line, people with less expensive homes are subsidizing those with higher value homes in certain neighborhoods.
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