anyone convert a multifam (4+) to single family?

Catch-22. The class of building will change, so your tax rate will go down. However, every time you do major improvements (and conversion into 1-fam will have to be filed), you will incur a change in your assessment (otherwise you're capped at 6% annually, 20% over 5? years). Clear as mud, yet? So depending on the specific numbers, you may or may not see a tax reduction.

I'll throw out examples - a single-family brownstone that has been a single-family brownstone for many years, but has undergone significant "cosmetic" changes (new kitchen, plumbing fixtures, A/C) will typically have much lower taxes than a house that was converted from multi-fam to single recently.

And in NYC, change of ownership doesn't trigger an increase in assessment, so that if you buy an existing 1-fam, you will reap the benefits of the length of time it's been a 1-fam.

From the dept of finance website for NYC:

Property is assessed at the following uniform percentages of full market value, unless limited to a lesser amount by law:
Class 1 - 6%
Class 2 - 45%
Class 3 - 45%
Class 4 - 45%
and also look at this:
http://www.nyc.gov/html/dof/html/property/property_rates_rates.shtml

This isn't quite the full picture - you have to look at someone's real-life tax bill to see the breakdown (you can access everyone's bill via the website). In general, it's the tax rate X assessment value (and add the caps mentioned above as well as other exemptions).

So, if I'm following you (doubtful), the conversion to Class 1 (i.e., 3 or fewer units) will trigger a new assessment, albeit at the lower Class 1 rate, but will be done at today's FMV, not at a historic Class 1 rate that would presumably be cheaper because it wasn't fully marked to mkt by a sale or big reno. Did I get that right?

Yep, maybe there's some way around that but in my perusals of tax bills in the system, I haven't seen it.

You're not marked to market by a sale, you inherit the capped rate from previous owner. So if you purchase a fully reno-ed single-fam with a low tax rate, you keep it. Never seen such a beast in Manhattan, but they exist aplenty in BK - you will see 2-3m THs with very low taxes (5k).

What I've also seen (in Bk) is a (gut) conversion of a 2-fam to a 1-fam in practice but the C of O wasn't changed, even though the job was filed with the Dept of buildings and somehow that wasn't considered a "major" reno.

Pretty interesting, nyc10023.

Seems like there is a huge incentive to not have more than three units in the building.

Gosh, I wonder why. Could it be the voters in Bk, Bx, Qns & SI? I could smack around the ppl in Bk who whine about their PS options when they are paying 5k in prop. taxes on a 2m+ Park Slope TH.

I consulted with someone that specializes in property taxation with the same question a while ago. He suggested that I do whatever i want with the house, but not try to change the 4 family status, because, in the case of this specific brownstone, it has a cap in future increases (6 % a year, 30 % 5 year max) and if I changed the status the property would lose its' cap advantage. Each property is different. There was an article years ago in the NYT (somebody posted it here a couple of months ago) showing stressed owners who changed the status of their houses and went from 6,000k to 23,00k a year. Where is this house?

Just to add to the above; the BIG advantage to class one is the rigid cap on FUTURE increases (no more than 20% over any 5 years), so you have lots of such properties with TARGET values in the stratosphere, but they will never get there because of this cap. But it's not a "reversion", so if it's already high, your taxes won't go down substantially, you'll just be capped from FUTURE increases (NB: this is a good reason to do a simple conversion one year to get your tax class changed, and then wait till the next year to do your substantial renovations which will result in a large incre4ase in the target AV).

Mimi also correctly points out a mistake made by MANY in Harlem, BedStuy and other places by people who bought houses needing the income from market rate apartments to help them carry the debt service. So they made 4 unit buildings and their taxes went up by the same or more than the rents went up and got themselves into trouble. Fortunately for them, at the time the market was going nuts so anyone who couldn't afford the carry simply sold at a huge profit and moved on.

But the lesson is to know what you are doing before you do it, or you can get royally screwed in NYC. A somehwat unrelated example: a guy owned a brownstone with 5 residential units and a doctor's office. The doctor moved out and he saw he could get much more rent as residential, so he converted it into an apartment.... BOOM!!!! every one of the 6 units instantly became rent stabilized!

30 yrs: I'm not sure that doing a "simple" conversion (say, ripping out the extra kitchens only) would incur a small tax increase. Can you point to a specific property where that worked?

Mimi: A 4-family is taxed at a higher rate than a 1-fam, so it would be up to the numbers for a specific property as to whether you would save more keeping it as is with the cap or changing the tax class to get a lower rate.

Harlem: http://query.nytimes.com/gst/fullpage.html?res=9F07EFDA103AF933A15751C0A9639C8B63&fta=y&scp=2&sq=harlem%20real%20estate%20taxes%20brownstone&st=cse

30 yrs: to clarify, I see in the article that going from 4 to 3 fam can reduce the tax (due to change in tax class) w/o having the removal of a kitchen classified as a major improvement. Would the same really apply for going from 4+ fam to 1 fam with the removal of kitchens?

to clarify, that's what I was talking about: taking it from a 4 family to a 3, not straight to a 1. But unless I'm mistaken, 3 families are the same tax class as 1 families (Class 1). So you go from 4 to 3 to get into Class 1, THEN you do your major renovations since you are in Class 1 already.

Kiss, the person I spoke with told me that going down from 4 to 3 or 2 and losing the cap was going to be disastrous. This will depend on how much tax you pay for a 4 unit. How much is it in your case?

30yrs: But don't you lose your cap even if you stay in class but make what they consider to be a major renovation? My reading of the regs suggest that any major reno can trigger a loss of cap, and that is not limited to a change in tax class. You have to file with the city going from 3 to 1, so there's no way to mask it, as opposed to renovating an existing 1-fam, where (my understanding is) you don't have to file if you are doing new kitchens & baths (assuming no changes to plumbing stack).