I'm trying to decide whether to go into contract on a new condo in Williamsburg. My offer has been accepted; I think it's a great deal, at least compared to comparable listings; and I like the neighborhood and the unit. But I'm scared about the unabated taxes. According to my "Schedule A", current abated taxes are < $20/mo but unabated taxes (assuming $820K purchase price) will be about $1,200... [more]
I'm trying to decide whether to go into contract on a new condo in Williamsburg. My offer has been accepted; I think it's a great deal, at least compared to comparable listings; and I like the neighborhood and the unit. But I'm scared about the unabated taxes.
According to my "Schedule A", current abated taxes are < $20/mo but unabated taxes (assuming $820K purchase price) will be about $1,200 / mo !!! (phased in 20% per year starting after 10 years)
Even if taxes were reassessed for my lower (impending) purchase price...
$610,000 / $820,000 = 74%
74% * $1,200 = $892 !!
But taxes on a similar condo (sq ft, area and price) are only $408:
http://www.streeteasy.com/nyc/sale/406050-condo-williamsburg-brooklyn
and this one, they're $360:
http://www.streeteasy.com/nyc/sale/355569-condo-180-south-4th-st-williamsburg-brooklyn
Mine taxes would still be significantly higher than those other listings. How do you explain the difference? Do taxes in NYC vary by "age of building" or "number of units"?
ps. I think Noah is right on... as the abatements expire, property values for new development will fall:
http://www.urbandigs.com/2007/04/biggest_scam_in.html[less]
Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
sounds a little bait and switch. no? kinda like those mortgages that people took out..."pay nothing today....adjusts accordingly" we all watch 60 minutes and wonder how those people could have been so stupid. do you want to be on 60 minutes whining? move on.
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Response by bjw2103
almost 17 years ago
Posts: 6236
Member since: Jul 2007
djradon,
Wow, are you sure about the phasing in? $1200 seems exceedingly high for monthly taxes unless we're talking about a 2500 sqft+ unit. I thought the phasing in happened every 2 years? I wouldn't worry too too much about the abatement being a scam. It affects the price, sure, but you determine the sales price here, so you can bid accordingly, and explain your thoughts on the abatement if you feel the need to. Figure out if you can comfortably afford the place assuming no abatement. If you can't, I would start to question the purchase.
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Response by djradon
almost 17 years ago
Posts: 74
Member since: Jun 2008
bjw: I'm sure. Phasing in on abatements varies, but in Williamsburg new dev that has 15 year abatements, I've only seen the "going up 20% per year in years 10 thru 15" model.
My unit is supposedly 1300 sq ft (gross), worth about $600,000, so very comparable to the older condos listed above. It just doesn't make sense!
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Response by pjc
almost 17 years ago
Posts: 175
Member since: Dec 2008
I am very concerned about the phase-out of the tax abatement - but what I think is interesting is that you are buying after a 26% price reduction from the original asking price. So this tax-abatement expiration may be priced in, seems you are getting a realistic price here.
When I was negotiating for a new development unit (in Greenpoint), I only got them to reduce their original price (set in late 2007) by 17% and they refused to go any lower. And the deal didn't happen. (Lucky for me). And the unit is still available.
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Response by sticky
almost 17 years ago
Posts: 256
Member since: Sep 2008
14 grand a year in taxes for a freaking 1000 sf condo is stupid stupid stupid.
However I found that taxes are outrageously high at several new Williamsburg devs like nForth and the Rialto.
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Response by budda
almost 17 years ago
Posts: 69
Member since: Jan 2009
There is no hype. Your taxes will be 1200 per month. You get a temporary savings of about 60K in taxes due to the 421a abatement spread over 10 years. You get what you get and thats it. Decide based on the final tax figure and adjust the price for the one time savings you get over ten years. It is simple.
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Response by djradon
almost 17 years ago
Posts: 74
Member since: Jun 2008
But buddha, why would taxes be higher for my place than for comparable non-new-dev condos in the area? Also, the savings in 10 years (@$1200/mo) are about $144K, and in the remaining 5 years an additional $36K
sticky: is it stupider than paying less taxes for a smaller place? stupider than paying more taxes for a bigger place? stupider than paying your landlord's taxes as a renter?
sounds a little bait and switch. no? kinda like those mortgages that people took out..."pay nothing today....adjusts accordingly" we all watch 60 minutes and wonder how those people could have been so stupid. do you want to be on 60 minutes whining? move on.
djradon,
Wow, are you sure about the phasing in? $1200 seems exceedingly high for monthly taxes unless we're talking about a 2500 sqft+ unit. I thought the phasing in happened every 2 years? I wouldn't worry too too much about the abatement being a scam. It affects the price, sure, but you determine the sales price here, so you can bid accordingly, and explain your thoughts on the abatement if you feel the need to. Figure out if you can comfortably afford the place assuming no abatement. If you can't, I would start to question the purchase.
bjw: I'm sure. Phasing in on abatements varies, but in Williamsburg new dev that has 15 year abatements, I've only seen the "going up 20% per year in years 10 thru 15" model.
My unit is supposedly 1300 sq ft (gross), worth about $600,000, so very comparable to the older condos listed above. It just doesn't make sense!
I am very concerned about the phase-out of the tax abatement - but what I think is interesting is that you are buying after a 26% price reduction from the original asking price. So this tax-abatement expiration may be priced in, seems you are getting a realistic price here.
When I was negotiating for a new development unit (in Greenpoint), I only got them to reduce their original price (set in late 2007) by 17% and they refused to go any lower. And the deal didn't happen. (Lucky for me). And the unit is still available.
14 grand a year in taxes for a freaking 1000 sf condo is stupid stupid stupid.
However I found that taxes are outrageously high at several new Williamsburg devs like nForth and the Rialto.
There is no hype. Your taxes will be 1200 per month. You get a temporary savings of about 60K in taxes due to the 421a abatement spread over 10 years. You get what you get and thats it. Decide based on the final tax figure and adjust the price for the one time savings you get over ten years. It is simple.
But buddha, why would taxes be higher for my place than for comparable non-new-dev condos in the area? Also, the savings in 10 years (@$1200/mo) are about $144K, and in the remaining 5 years an additional $36K
sticky: is it stupider than paying less taxes for a smaller place? stupider than paying more taxes for a bigger place? stupider than paying your landlord's taxes as a renter?