Higher home prices don’t mean a higher tax burden, study says
Staten Island and the Bronx have the city’s highest rates
Staten Island and the Bronx have the city’s highest effective property tax rates — even though homes there are worth far less than those in Manhattan.
A report by the Citizens Budget Commission analyzed property tax rates throughout the city, according to Crain’s New York. It focused on Class 1 properties — one- to three-family homes and condos up to three stories — which make up nearly half the market of taxable properties.
Homeowners in the Bronx and Staten Island paid more than 1 percent of the value of their homes in taxes annually, the report said. Meanwhile, homeowners in Manhattan and Brooklyn paid 0.4 percent and 0.7 percent, even though median home prices in the boroughs are hundreds of thousands of dollars higher.
“One of the basic principles of good tax policy is equity: similarly situated taxpayers should have similarly sized tax bills,” Jenna Davis and Ana Champeny, the report’s authors, wrote. “New York City’s property tax system does not comport with this principle.”
The gap in the tax burden stems from how the Department of Finance looks at a property’s taxable value. Even if home prices in a neighborhood are rising rapidly, rules don’t allow assessed property values to increase dramatically. The idea was designed to shield homeowners from big increases.
Last year, the group Tax Equity Now filed a lawsuit, alleging the tax system is racially biased. That lawsuit remains ongoing. [Crain’s] — Meenal Vamburkar