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New York

Officials call for property tax overhaul

But admit that there is no “magic wand”

The record-setting apartment at One57, which sold for over $100 million, is valued at just $8.1 million by the city.
The record-setting apartment at One57, which sold for over $100 million, is valued at just $8.1 million by the city.

Deputy Finance Commissioner Michael Hyman told a hearing of the Assembly Committee on Real Property Taxation Friday that NYC’s property tax system is “broken” and is costing the city millions.

“It’s broken, but I don’t have a magic wand,” Hyman said, according to the New York Post. “There are inequities in the system.”

Currently the city values co-ops and condos by comparing them to “similar” rental units (which are sometimes regulated) in the area rather than sale prices. That means high-end properties are grossly undervalued.

It “can be problematic,” Hyman said. “High-end properties tend to pay lower taxes.”

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George Sweeting, Deputy Director of the New York City Independent Budget Office, added that the city see a windfall of cash if the system was overhauled.

“If these dollars were instead included in the base, the overall tax rate could be reduced, although not without some redistribution of tax burdens,” he said.

Case in point: the record-setting apartment at One57, which sold for over $100 million, is valued at just $8.1 million by the city.

“It is apparent from the testimony that the entire process is flawed. The poorest of the poor are subsidizing the wealthy,” Assemblyman Mark Gjonaj said. [NYP] – Christopher Cameron