Homeowners in upscale neighborhoods such as Brooklyn Heights and the Upper East Side Side often pay less in property taxes than their counterparts in not-so-affluent areas such as East New York and Canarsie, a new review by the Independent Budget Office shows.
Property taxes account for $18.7 billion annually — about 40 percent of all New York City’s revenue. Tax rates are determined by assigning an “estimated market value” to a property and then applying a uniform six percent assessment to that value, according to the New York Daily News.
But the IBO review of records in 135 city neighborhoods — performed at the request of the Daily News — found the city overvalued residential property in 28 of the poorest neighborhoods while undervaluing residences in pricier neighborhoods.
In East New York/Cypress Hills, for example, the median sale price for residential properties is $249,000 according to the report, but the city’s Finance Department pegs the median estimated market value at $394,000, the review showed.
But in Park Slope, the city’s median estimated market value was $1.29 million, per the Finance Department, while the actual median sales price for that neighborhood was $1.42 million, according to the recent investigation.
“The very first thing in any system is you have to get the market value right,” a former staffer for the Finance Department told the newspaper. “If you can’t get the market value right, the rest of the assessment system is compromised.” [NYDN] – Hiten Samtani