Property taxes set to rise faster than property values
New York City property taxes, including on 69 homes damaged in Hurricane Sandy, are set to rise at a greater rate than property values, due to a peculiarity in the tax law, the Wall Street Journal reported.
Though market values for single-family homes were up just over 1 percent in the past year, taxes will rise nearly 3.7 percent. This amounts to an increase of $153 to bring the average taxes to $4,324 for homeowners. This is due to a property-tax law quirk that allows increases in assessments due to rising real estate values to be phased in over years, with the period varying based on the type of property. The quirk softens the blow of escalating taxes in a rapidly rising market, but bumps taxes up even when the market loses steam.
Condo owners, who saw their properties rise in value 2.4 percent over the year, will see a tax bump of 5.8 percent to an average of $7,499. And owners of co-ops will see their taxes rise 4.1 percent, even though the value of their properties only increased by 2.9 percent over the year.
The city’s Department of Finance issued a statement saying that, so far, it had marked down the value on over 200 homes damaged by Hurricane Sandy. But 69 of these homes would still see their tax bills rise, due to the phasing in of past tax increases.
The city has provided an interest-free extension for property-tax bills due on Jan. 1 to affected properties, as The Real Deal previously reported. It may also look to provide a rebate on a portion of taxes due this year on damaged properties. [WSJ] – Hi