will your property taxes go up when new york city reforms the property tax
system will demystify this topic in the following video i'm Nick at Hauseit we can
save you money on your next purchase sale or rental in new york city long
island the hudson valley or south florida learn how by visiting
hauseit.com that's Hauseit with an 'A' so let's get started
so as we alluded to new york city property tax reform is on the horizon we
think it's not a matter of if but rather when these changes will occur
so let's backtrack a little bit and talk about how we got to where we are today
the current property tax system in new york city was enacted in 1981. it has
been unchanged for approximately four decades and many critics have assailed
the current system as being quite unfavorable in terms of its treatment of
condos and co-ops compared to one to three family homes in other words
people with big townhouses in brownstown brooklyn for example
are paying a lot less in terms of the percentage of property
tax to market value versus somebody with a condo or a co-op apartment in the city
so politicians have been making noise about this for years
but quite unsurprisingly nothing has actually happened up until 2018 and in
2018 the mayor at the time bill de blasio basically announced a commission
that was tasked with exploring ways to reform the current system so a couple
years passed and finally in december of 2021 that commission actually released a
final report which is available online which outlines some of their
recommendations for overhauling the system so let's go over a specific
example which illustrates what critics believe to be unfair treatment of
apartments compared to townhouses so here on the screen we have the
picture of 345 park place this is a massive townhouse in prospect heights it
was recently on the market for 6.4 million dollars
now the current property taxes for this townhouse
are just $694 a month this equates to an annual property tax
obligation as a percentage of market value of roughly 0.15% now
compare this to the average nationwide of a little bit over one percent so in
the rest of the country a townhouse with a value like this or a home say a home
worth six million dollars should have an annual property tax levy of roughly one
percent or sixty thousand dollars uh that is five thousand dollars a month
and instead this townhouse currently is paying less than seven hundred dollars a
month in property taxes now let's look at a condo here we have on the screen a
condo in murray hill at 415 east 37th street apartment 29G this property was
recently on the market asking $1.2 million
and the monthly property taxes for this condo are
$1,443. that's right this apartment which is only worth $1.2
million has a property tax bill per month which
is more than double than what the owner of a $6 million
townhouse in brooklyn is paying so i think this example perfectly illustrates the perceived problem with the current system
so now let's get to the good stuff will your property taxes go up
when new york city overhauls the system well it depends on your property type
but let's think a little bit about how they've changed the underlying system
and then it will tell us whether or not your taxes may go up so currently new
york city has a bunch of really confusing tax classes so one apartment
could be in a different tax class from another apartment in a slightly bigger
building and then townhouses of course are treated differently it's really
complicated and confusing so the commission basically suggests that they
tear up all the existing confusing tax classes for small residential properties
and basically just create one tax class then they propose calculating property
taxes based on the percentage of actual market value and the current tax rate
proposed is 0.814%
so in other words new york city is basically thinking about changing
property taxes to charge you around 0.8 percent of your property's market value
therefore if you currently own a property that is worth one million
dollars or more in new york city and you're paying less than around eight
thousand dollars a year which is point eight percent your taxes will likely be
going up under this commission's proposal
so who is most at risk well for starters people who own
townhouses in brownstone brooklyn places like bed stuy where it's very common to
see listings that have super low property taxes
this is a great example where potentially your property taxes could go
up 200 300 400 percent if this system is actually enacted
other types of properties that might be harmed
for example we found that condos in buildings with 10 or fewer units may
face substantial increases in their property taxes we have additional
examples on our blog so check out houston.com to learn a bit more and we
also do have a link on our page there for an interactive calculator that will
actually tell you or forecast whether your property taxes may go up for your
particular home in new york city so before we let you go let's end on a
positive note will anybody's property taxes actually go down if the
commission's proposal is enacted well the answer is yes
if you're fortunate enough to own a property in staten island
south brooklyn places like bay ridge or parts of queens it's possible under the
new system that your property tax bill will go down so we hope you found this
video to be helpful if you are looking to buy sell or rent in new york city we
can save you money at Hauseit learn how by visiting hauseit.com that's house it
within a we greatly appreciate your time and hope that you will subscribe to our
channel if you like our content i'm Nick at Hauseit and we'll see you on the
next one