Tax Abatements!

The 25 year abatement is the only one I find advantageous to a buyer.
10 years are a ticking time bomb. You want be sold by year 5.

Northside Piers and THe Edge needed incentive to be built. Thus the 25 year abatements. The pioneers usually get the sweetest concessions,for bringing the draw.

BJW, actually your unabated taxes are $5.5 today. 20 years from now (who cares that far ahead) they will likely be $20k. Of course along with everything else including salary inflated.

Though another thing to consider in our new, too big to fail, rules can change at any time world. If there are too many condo units out there with too many abatements crashing at the same time, it's not impossible our govt doesnt grant a 10 year extension.
Unfortunately this is the poison thinking that our government has encouraged even in an economic conservative like myself. 3 years counting and still no reenactment of Glass Steagall...hello McFly.

"The 25 year abatement is the only one I find advantageous to a buyer.
10 years are a ticking time bomb. You want be sold by year 5."

truthskr, I think it's (unfortunately) more complicated than that. What may be more important is how much of a premium you're paying for that upfront. 10 year isn't bad at all if the unabated taxes (ie: the assessed value of your property) don't blow up and there was no real premium placed on the abatement.

And yes, my unabated taxes are as of today, but those are the only "real" numbers here - projections that far out are pretty useless. And as you say, they will rise with everything else, incomes included.

I wouldn't expect an extension on abatements, maybe a slower phase-out, but you're right, that kind of thinking seems to be all too prevalent.

My words:
and my sense is that, at least in the bubble hey-day, people overpaid for abated properties, in the effort to leverage in all ways as much as possible, so as to make the most money possible in the never-endingly bullish RE market--for most of them their properties are worth less than they paid, and their monthlies have ramped--

Those of my personal troll:
another example of your casual "facts" that have no basis in reality as far as I can tell. For those who bought during the bubble, which tax abatements have expired? 421a ranges from 10-25 years, so quite unlikely monthlies have ramped up yet.

My words:
In fact most tax-abated properties bought during the bubble are currently priced well lower than pre-2008, based on weakness in the market generally, and that much (esp in cases of 10 year abatements) of the abated tax has been phased in. And one cant argue that the abated taxes are higher in all cases, regardless of the time of the abatement. Some have ramped, all are higher. And many bought during the bubble with only concern being that they could afford to cover current expenses based on current income. The future (as in now when prices are in fact lower) was never a concern as it was assumed the ever-bull market would allow for refi and other means to cover increasing expenses (like phase-in of abated taxes, io and/or balloon mtges, etc).

During the bubble, especially, abated properties were typically overpriced, as desperate lemmings sought any and all forms of leverage they could find. Developers, not stupid, took advantage of this, and priced rich, accordingly.

For buyers of abated properties during the bubble, taxes are unarguably higher today (in some cases fully phased-in, even), and prices are lower. Look past your troll-blinders, before you blather.

or just blather on as you likely will....whatever

More stimulators coming your way!

http://www.nytimes.com/2012/07/25/business/economy/fed-leaning-closer-to-new-stimulus.html

JButton (and others), I can give you my own personal experience of a 25 year tax abated property. My condo was a new construction in the Hamilton Heights section of Harlem built on a lot that was being used as an illegal parking lot. I signed the contract in July 2005 and closed in early 2006. This was a full market rate building with no restrictions. My taxes are ridiculously low because the city realized just how unlikely development would happen under any other circumstance. While the building was not a crackhouse- there were a number of crack dealers across the street. The neighborhood has changed a great deal since then, but it's only first becoming apparent now- as restaurants with sidewalk cafes are first entering the neighborhood. I plan on remaining in this apartment for the long haul- and expect a great deal of additional changes coming to the neighborhood. As to speculation on pricing- I believe realtors would currently price my apartment at a potential profit for me, but I think it would close at break-even (transaction costs included). Debate all you want whether I ovepaid or not- but I love my apartment and my all-in costs are kept reasonable.

"In fact most tax-abated properties bought during the bubble are currently priced well lower than pre-2008, based on weakness in the market generally, and that much (esp in cases of 10 year abatements) of the abated tax has been phased in."

Yes, prices are down, but for the former reason much much more than the latter. You'd be hard pressed to quantify the effect tax abatements have on pricing, so it's a bit silly (and of course convenient, given your obtuseness) for you to make such a declaration.

"And one cant argue that the abated taxes are higher in all cases, regardless of the time of the abatement. Some have ramped, all are higher."

There's absolutely NO way you can prove this. None. You clearly don't understand how property taxes work in this city, let alone abatements. Taxes are based on two things: assessed property value and tax rates. First, not all property values have gone up since the bubble. Second, depending on when someone bought exactly, tax rates are actually LOWER than they were not that long ago. See here (most of what we're talking about falls under Class 2): http://www.nyc.gov/html/dof/html/property/property_rates_rates.shtml. Third, depending on the length of the abatement, many buildings haven't even started phasing the abatement out yet. See here: http://www.nyc.gov/html/dof/html/pdf/03pdf/421a.pdf

"And many bought during the bubble with only concern being that they could afford to cover current expenses based on current income. The future (as in now when prices are in fact lower) was never a concern as it was assumed the ever-bull market would allow for refi and other means to cover increasing expenses (like phase-in of abated taxes, io and/or balloon mtges, etc)."

Undoubtedly there are cases of this. But what's your point? That people made bad decisions? That was true regardless of any tax abatement. But please, blather on mindlessly and regale us with tales (and no examples to speak of) of crippling unabated tax amounts.

> Though another thing to consider in our new, too big to fail, rules can change at any time world. If there are too many condo units out there with too many abatements crashing at the same time, it's not impossible our govt doesnt grant a 10 year extension.

i see that one close to impossible, unless non-abated owners want to have their own property taxes rised to make up for that revenue. it's being assumed as it's going to be there and the city needs the $. not only CA cities can barely handle rising pensions costs, NYC still has a way to go improving schools. these are not discretionary items and need to be paid.

takeaways from my persoanl troll's comments:

moneys due yearly for RE taxes have actually gone down in recent years for many NY properties, such that many abated properties arent expeiencing an uptick in their annual tax bill, despite the phase-in of taxes.

yikes is confused to think that, if one's taxes due increase in a given year, all else equal, one's property value will decrease. it is a fallacy to think that if there is an increase in the cost to carry an investment, the value of said investment will decline.

wild shlt, no?

So, i was hunting around looking for some examples of buildings with abatements that are having issues. There are a number of them. But this sale caught my eye particularly. And I noted something generally. It seems as though the tax amount listed is often incorrect. There are huge disparities in the amounts listed for similar apartments originally sold in the same time frame. I'd actually be more inclined to list this one in the comps section but then nobody would see it, so my apologies, but here is an example of a total mess. Look at the building, the number of listings, the sales and rental rates. I saw more than one short sale in the building, just looking for a couple of minutes. Just a guess, I don't have NWT's patience or ACRIS acumen, but i'd think it's very difficult, maybe impossible, to get a mortgage on a unit in some of these buildings.

http://streeteasy.com/nyc/sale/619444-condo-20-west-financial-district-new-york

11/08/2006 Previous Sale recorded for $515,000.
06/30/2011 Listed by Synergy NYC at $599,000.
10/29/2011 Price decreased by 17% to $499,000.
01/11/2012 Listing entered contract.
06/21/2012 Listing sold.
06/21/2012 Sale recorded for $430,000.

bottoms, you can't read too good, can you?

Your words: "all real estate taxes are higher"
My words: No, not all, as I demonstrated with, you know, actual numbers above. I don't claim to know the % of apts that have seen flat to slightly lower taxes, but your statement was so extreme that it was rather easy to prove you wrong.

"yikes is confused to think that, if one's taxes due increase in a given year, all else equal, one's property value will decrease"

That's nice, but pretty friggin useless. Tell me - when is "all else equal"? I generally find it more interesting to discuss what's actually happened.

show data on apts where annual tax bills for properties are lower now than prior to 2008/09 bubble peak. All taxes are in fact higher as I describe, but for serious outlier exceptions, where parties have specifaclly negotiated lower taxes from the city due to erroneous assessment or the like. Your attempt to one-up in troll-semantics is a fail.

what's useless is your blather--the only way to consider the effect of a specific factor on any complicated situation is to consider it in isolation from other variables---"all else equal"

troll on

"show data on apts where annual tax bills for properties are lower now than prior to 2008/09 bubble peak."

Sure thing: http://nycprop.nyc.gov/nycproperty/statements/mvh/jsp/stmtassessmvh.jsp?statementId=184204431

That was the very first apartment I even looked up. But you'll probably say I found the needle in the haystack.

"All taxes are in fact higher as I describe"

Whoops.

The trend is pronounced as well. bottoms, I can post more if you want, given how bad you are at this.

Tax Year
Market Value
2012/13 83,301
2011/12 89,703
2010/11 97,168
2009/10 101,932
2008/09 136,690

I wonder why it took so long for that building's J51 to kick in. That owner bought in 2007 and paid real taxes until July 2011.

The quarterly statement from back then says "Congratulations! Your J-51...."

troll-link goes nowhere

Works fine for me, but I posted the numbers for your benefit as well. Still, if you don't believe, go here: http://webapps.nyc.gov:8084/CICS/fin1/find001i

Type in my example (Brooklyn, 85 North 3rd, Apt 501), click on Market Value History, then weep.

troll, the annual tax on this property, without consideration of abatement, went from 4110 to 5035 between 2008 and 2012 (a 23% increase). whatever the status of the abatement or the "market" or "assessed" values, they're irrelevant to my comment. the tax assessed for this property has gone up.

your ex has proven my point: that the actual annual tax in $$, without consideration of abatement, went up. find me a property where taxes have gone down since the bubble peak.

and in this case nwt is correct. the abatement track is not shown properly--could be that the building had c of o, with owners closing, but hadnt finished the abatement process with the city, as often happens. if the abatement track was shown properly the actual tax paid would have increased by the amt of the abatement phase-in PLUS the 23%.

foolish troll---now go find me a property where taxes have gone down since bubble peak 2008.

bottoms, way to cherry pick the date there. Totally ignoring the fact that immediately after they were 4,110, they actually went HIGHER than the current amount of 5,035. You explicitly said 2008/09 and yet point to a tax bill with 07/08 rates (the lowest rates since 2002/03)! Amazing! Sorry you're so wrong on all this, but you should probably get used to it. Property taxes do not only move in one direction.

"and in this case nwt is correct. the abatement track is not shown properly--could be that the building had c of o, with owners closing, but hadnt finished the abatement process with the city, as often happens. if the abatement track was shown properly the actual tax paid would have increased by the amt of the abatement phase-in PLUS the 23%."

Which, of course, totally negates your point that the monthly carry right now has ramped up. It's actually WAY lower. Thanks for demonstrating that.

nwt---pls explain this---my troll is confused

Kinda obvious who the real troll is here. What will you do if/when SE greys you out again? Create yet another alias so you won't be perpetually ignored?

But please, explain how some owners' property taxes have gone down and "ramped up" at the same time...

I don't remember what the assessed value and the rate were/are.

Taxes billed were $5-something thousand in 2008-ish, and about nothing once the J51 became effective on 7/1/2011.

If somebody wants to do some database work, they could take the tax-roll spreadsheets for 2007 and 2011 and see how many buildings went up or down or stayed the same.

A particular building getting an abatement doesn't seem to say much.

The whole point was to demonstrate that sometimes taxes do come down. They don't always "ramp up," as was blithely assumed by bottoms, SE's resident drivel-master.

nwt, the market and assessed vals went down, but the rate went up sufficient to effect a tax increase from 4ish to 5ish, as has happened all over the city. were there no abatement, the taxes would have increased 23%, from 4110 in 6/08 to 5035 in 2012. in fact that would be the tax experience for most properties.

and once an abatement is approved, and taxes begin the phase-in process, regardless of the term of the abatement, the amt abated is only reduced over time. so if the actual taxes remain the same or increase, the billed amount does also each year.

this is not an example of a property whose taxes would have gone down, were there no abatement. in fact it is quite the opposite. in fact its taxes went up, but they went from being unabated to abated, based on the delayed NYC approval of the abatement app.

troll, let's keep it simple, find me a normal, unabated property where actual annual tax bill was less in 2008 than it is for 2012. aint no place.

troll on, troll.

so if the actual taxes remain the same or increase, the billed amount INCREASES also each year.

"find me a normal, unabated property where actual annual tax bill was less in 2008 than it is for 2012. aint no place."

If you insist, troll: 1 Main St (Dumbo), Apt 9A.
http://nycprop.nyc.gov/nycproperty/statements/soa/jsp/stmtassesssoa.jsp?statementId=131905870
http://nycprop.nyc.gov/nycproperty/StatementSearch?bbl=3000271080&stmtDate=20120608&stmtType=SOA

2008 Annual Unabated Tax Amount: $14,203
2012 Annual Unabated Tax Amount: $12,607

I'm sure you'll find something wrong with this one too, but you should probably stop before you dig that hole any deeper. It's embarrassing.

In terms of Tax Assessment, it seems like there is a certain degree of randomness here also...
Seems like properties are never really assessed at true and Full Value... What gives?

Also, might it be that Property Tax of 1 property or another, is levied at the whim of one ''City Tax Levy-er or another'' which then explains why some Townhouses have ridiculous Taxes while a neighbor might be quite reasonable?

Might some of these Tax Abatements also be extended or perhaps actual amount lessened when the time comes?

For co-ops and condos, the city figures a Full Market Value based on so-called comparable rental buildings. That FMV can go up or down, e.g. if the building disputes the comps. From there it calculates an Assessed Value at 43% of FMV, but there's a phase-in period for changes, so the levy is against a Transitional Assessed Value after exemptions and abatements.

There's a comparable-building report for each year for each borough. Those list the FMV.

There're 318 Upper West Side co-ops in both the 2008 and 2011 lists. (There're a few more that don't match because of neighborhood-classification changes.)

For those 318, total FMV was $4,336M for 2008 and $4,812M for 2011, up 11%.

The median co-ops (545 WEA and 202 W 85th) went up 12.6%.

Only 38 of the 318 went down, from 0.4% to 43.5%.

Again, the "Market" in FMV has nothing to do with what they'd sell for.

> Might some of these Tax Abatements also be extended or perhaps actual amount lessened when the time comes?

no way, as somebody posted before, the city counts on that revenue. it's better for the city to change ownership towards somebody that can afford them instead of losing revenue to benefit those that didn't plan well. as the area improves, that change of hands becomes more feasible.

remember that great part of the point of revitalizing areas was to increase the tax base, it wasn't about homeownership but about bringing bad areas back in shape. the tax revenue is needed, schools in those areas still need improvement and the pension bomb is ticking.

besides, the carrying cost increase is not impossible to cover with an extra part-time job on weekends if the owner really wants to keep the property.

troll,

im done wasting time tracking down your pathetic data-fails.

again you simply got it wrong--

the tax in 08 on this property prior to abatements was 5173, abatement amt 1544, taxes paid 2008 $3629

the tax in 2012 was 12607 prior to abatement, abatement amt 1801, taxes paid 2012 $10806

this poor owner got bit bad by the abatement game!! a prticularly bad example

for all who care to see this, go to acris bklyn 003, block 00027, lot 1080, see the june 08 and june 2012 quarterly tax statements

wtf!, troll, you are a complete dope and i will not waste any more time engaing your moronic blather--not only do you have math issues--you cant even read a simple acris stmt--done--troll on--i will not respond--you are a fool

bottoms, you can't read. The tax in '08 prior to exemptions and abatements was $13,450 in June (adjusted up to $14,203 for the year in December). Now you're just lying to cover yourself, hence the "I will not respond" bullsh!t. What a troll.

Typical bottoms... disappears when proven wrong...

no disappearance--finished with you--the block/lot and simple instruction on how to verify your idiocy are provided above for any who care

it's too simple: this prop's taxes paid in 2008 were 3629 and for 2012 they are 10806

mark my last response to you, fool troll

go blather/troll elsewhere

No - your contention was that taxes always go up. This is a clear example proving otherwise, but you're too stubborn to concede. Probably for the best that you're stfu, troll.