City lawmakers are making another push to overhaul New York’s notoriously arcane property tax system.
A proposal backed by 13 Republican and Democratic City Council members would tax new homebuyers on the actual market value of their properties, the New York Post reported. Taxes for existing owners would remain unchanged.
“The Post calls it a gentrification tax or a ‘yuppie tax,’ but most NYers know it as the ‘de Blasio loophole,’” Staten Island City Councilman Joe Borelli said on Twitter Thursday morning. “My proposal would end the practice of charging more tax on a $500,000 home on Staten Island etc. than a $2 million home in Park Slope. This can be done Jan 1.”
The Post calls it a gentrification tax or a ‘yuppie tax,’ but most NYers know it as the ‘de Blasio loophole.’
My proposal would end the practice of charging more tax on a $500k home on Staten Isl etc. than a $2m home in Park Slope. This can be done jan 1. https://t.co/SDCB4zFjLp
— Joe Borelli (@JoeBorelliNYC) December 26, 2019
But the comprehensive changes necessary for a major reform will almost certainly require state legislation as well, and are not likely to happen in 2020, an election year for state Senate and Assembly members.
And despite Borelli’s tweet, most New Yorkers do not know the property tax system’s discrepancies as the “de Blasio loophole” or anything else. Few even understand the system, and some of those who benefit from it consider their real estate taxes too high.
The “loophole” Borelli cited may be a reference to a cap on property tax increases that over time has led to low taxes on homes such as de Blasio’s two row houses in Park Slope. As homes in some areas appreciated greatly in value, their property taxes did not rise commensurately because of the cap.
Borelli submitted his resolution earlier this month to City Council Speaker Corey Johnson and state Assembly Speaker Carl Heastie. A spokesperson for Johnson told the Post that the speaker is still waiting for a preliminary report from a property tax reform commission he and de Blasio convened in 2018. That report has supposedly been “near release” since July and is expected to miss its informal year-end deadline.
Other lawmakers backing the changes include Park Slope Democrat Brad Lander and Bay Ridge Democrat Justin Brannan.
“Borelli’s plan to reset the tax cap whenever a new owner purchases a property would bring a small drop of fairness to a system that is just completely screwed and totally unfair,” Brannan said.
The de Blasio and Cuomo administrations are defendants in a lawsuit filed by Tax Equity Now New York, a coalition of real estate and social welfare groups, alleging that the property tax system is unconstitutional because it discriminates against low-income homeowners and tenants. The “small drop of fairness” cited by Brannan would not meet the lawsuit’s demands for an overhaul.