Hello! In this video we'll show you how our 421 G tax exemption and abatement
projection model works. Everything in blue are inputs and everything in black
is a formula. Example, these are all for us these are inputs primarily because
these are actual historical figures that are available in the property tax
records. So let's take a look at the example mention in our article.
Google, you can search for NYC property tax lookup property tax bill online
NYC we personally prefer the lookup gets you to the same place.
I'll type in the address.
And you'll see that this is the account history. Property tax is actually filled.
This isn't very useful as we discussed these are the quarterly tax statements
for this specific condo unit and notice that because of New York's fiscal year
which overlaps two years you'll see that they're grouped per fiscal year. So all
of the abatement and exemption numbers should be the same per fiscal year which
makes it easy it means you don't have to look through four statements you can
look at one instead you can also go to this tab benefits
- business and construction to see data from the Department of Finance on the
remaining abatement and here you'll see that this will be reflected in the
current property tax bill and this is what is proposed for the next period as
it faces down this is a non landmark building and this is as a result the
benefit year is and on a 14-4 the abatement so let's
show you what the base payment rate is and all of this worked hi out to the
property tax bills and to our model. So if you take a look let's go back to our
model
your this we should start with even though this is the latest year we should
start with the priors just so we can model out how it looks as we start from
the original top level exemption level fifty nine thousand and thirty one and
as it fully phases out so this way we can see how it face is not fully and
remember the abatement starts phasing out approximately two years later so the
with the 421g abatement it is a steady level and then it phases out in
the remaining four years so this is how it looks and we can hide these numbers
out on any property by simply looking at the property tax bills
So let's take a look for example this is the latest one
and you'll see actually that these numbers will be the same for the for all
four statements in the same fiscal year right so this is nine one eight one the
the abatement this is the abatement at seven nine one six the and this is the
reduction in the assessed value so this is the assumption so if you just compare
it to another quarter in the same fiscal year you'll see that it is the exact
same number. So as discussed it changes per fiscal year if you go down to the
next fiscal year you'll see that again this is difference
of the SS value was a bit higher the prior year because it's in the process
of being phased out seven that one six and so on if you go to this year prior
you'll see you get seven nine one six cuz it hasn't started phasing out for
the abatement yet but this is the top level of the original base level for the
for the exemption about so if you just go back in a few more years you'll
verify that in these two prior years that indeed the exemption amount stays
here so this is the original high maximum exemption level and indeed it is
the same for the prior year as well.
59 or 31 and you'll see that this ties out with our projection model so we
start with the the year with the top line and then as it starts facing on so
this is the 59,031 that phases out and this is the abatement level 7,916 it
starts fading on 2 years later so for the specific unit you can see that the
property taxes are quite low right before it phase outs begin but it picks
up dramatically as both first the exemption and then the abatement is
completely phased out so we're looking at a difference from something like
$3,000 in 2017 to a steady rate of over $20,000 and remember this is for the
sake of conservatism assuming that assessed values do not increase in the
future as you can see here that clearly was not the case despite a soft property
market in New York City and they should why during this time period assessed
values have actually increased so as a property owner you'll definitely want to
engage a tax tertiary firm to dispute your any increases in assessed values
during the during the 421 she tax incentive period
many property owners forget to do this as a building and as a result assessed
values can get out of control and that they are surprised when the when the
abatement earnest and assessment is our exemption it's so please be careful and
we hope you enjoy this model you can download this using the link on this
page the whole Excel model we hope you've enjoyed it.
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