Commercial property tax delinquencies jump 50%

Property taxes account for more than 40% of NYC’s tax revenue

Mayor Bill de Blasio (Getty, iStock)
Mayor Bill de Blasio (Getty, iStock)

Delinquency rates on commercial property taxes have increased by about 50 percent since last year, according to an analysis by Crain’s.

Commercial properties — including retail spaces, offices and factories — were the most behind on their tax bills, with a 3.6 percent nonpayment rate on the first tax deadline in July. As of Oct. 15, the number of properties in arrears rose to 4 percent, according to Crain’s.

Property taxes account for more than 40 percent of the city’s tax revenues, with real estate taxes accounting for more than half of that amount, according to Crain’s. A drop in property tax collections could strain the city’s budget, which has already been battered by the pandemic.

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Properties with an assessed value of more than $250,000 have to pay taxes every January and July. Experts are closely watching the Jan. 1 tax deadline to gauge the health of the commercial property market, according to Crain’s.

After commercial property taxes have become past due for about three years, they are eligible to be sold at an auction with the money from the sale going to the city.

This year, however, the tax lien sale has been rescheduled three times due to the pandemic. Mayor Bill de Blasio initially pushed it to September, and Gov. Andrew Cuomo subsequently signed an executive order barring any liens from auction until October. He later postponed the sale until Nov. 3. [Crain’s] — Keith Larsen