New York’s property tax delinquency rate increased by 50 percent last year, according to a new report issued by the city finance department.
The number of delinquent Class One parcels at the end of fiscal year 2003 doubled to 137,578, and the amount owed increased 16 percent to $62.9 million.
Similarly, the number of delinquent Class II condominiums – where apartment owners are responsible for their own taxes – increased from 8,840 in 2002 to 15,688 in 2003, going from a 3.3 percent delinquency rate to 4.6 percent. Another 3,000 condos in Class One were also delinquent, versus 1,907 the year before.
“It’s a perfect example of the effects of the 18.5 percent property tax increase and the hardship it entails, and why we are looking to roll it back,” said City Councilman David Weprin, who heads the Council Finance Committee. “People find it hard to make ends meet.”
Department of Finance spokesperson Sam Miller blames the uptick in homeowner delinquency on a mid-fiscal year rebilling and a rate increase in the same bill. “It’s confusion, not hardship,” Miller said, adding, “The amounts are also small.”
Class One delinquencies, Miller said, totaled 127,581 on March 31, 2003, while 81,453 owed money on March 31, 2004. These numbers were not available in the report, which covered the fiscal year from July 1, 2002 to June 30, 2003.
Delinquency rates went down for the other tax classes, Miller said.
An 18.5 percent across the board tax increase became effective last year, and the administration is now seeking a $400 rebate that would need approval in Albany. The council is seeking a 2 percent rollback in the tax rate for all taxpayers.
The increase in non-payment also follows a 13.59 percent increase in the market values of the individual homes – the most of any kind of city property – and a 4.91 percent increase in taxes due.
The taxes on these properties are capped by legislative mandate at no more than 5 percent per year, or 20 percent in any five-year period.
The Annual Report on New York City Property Tax 2004 states, “Housing sales data for the first half of calendar year 2003 indicate a continued increase in home values throughout the city. Median prices in the second quarter of 2003 for single-family homes grew by 15 percent compared to the same period in the previous year.” Condominium market values also increased by 11.6 percent.
Statistics from real estate firms continue to show escalating sales prices.
Weprin said his own home’s market value went up 30 percent last year, and his taxes rose as well.
“These finance statistics support the fact that [the tax increase] was hard, and supports the attempt to roll it back,” Weprin added.
While homes comprise 49.9 percent of the full market value of all city property, they still pay less than apartment buildings and commercial properties. In fiscal year 2004, homes picked up 14.9 percent of the entire $98.6 billion tax levy, versus 11.29 percent the year before.
Class One’s share of the tax levy has also doubled since 1991, while its tax rate rose from $9.92 to $14.55 per $100 of assessed value.
These increases have combined to put extraordinary pressure on long-time homeowners and seniors whose mortgages are paid off, taking the lenders out of the loop of ensuring the taxes are paid.
Also, those on fixed incomes and social security have not seen their incomes rise at the same pace as rising taxes, and are essentially house-poor.
An administrative glitch at the finance department also makes it difficult for people making coupon payments to pay the correct amount for the second half of the tax year.
Finance continues to send out four printed payment coupons in June, even though the tax rate and bills typically change for the January and April payments. Those using these last two coupons and not the newly minted December bills will either over- or underpay, depending on their tax class and the tax year.