Sale at 350 East 82nd Street #14D

I don't work the East Side that much (I'm mostly downtown) but the monthly nut of $7K would give my East Side clients pause. Looks like the real estate taxes are nearly double what they'd be at 200 E. 94th.

ali r.
{downtown broker]

Surprised that the listing does not have real estate taxes. Outdoor space is indeed nice. 4th bedroom is carved out of the living room which means that the dimensions of the living room are incorrect on the floor plan. Total sq footage is correct.

The City is killing property owners with taxes. This is a great example of high taxes.

As a property owner I am inclined to agree with you, 300, but the problem is that the city needs money. The alternatives are business taxes, which companies have successfully argued their way out of by threatening to relocate, or higher income taxes.

Our mayor couldn't even get a tax raise on the wealthy for something that sounds like a no-brainer -- putting four-year-olds in school -- so how is the city going to manage it for other purposes?

Ali, City needs money as it is wasting it on programs like housing the homeless in hotels rather than buying them a greyhound ticket to home. In addition, many areas in Brooklyn and Queens are undertaxed relative to Manhattan. It is not that schooling has improved in the areas of manhattan where taxes have gone up. Think Hell's kitchen.

And items like this "Mr. de Blasio, for his part, included $16 million in his budget proposal to provide legal services to immigrants in detention and to asylum seekers".

Per $. Education spending 35c, Social Services 18c. Effectively forgone taxes on subsidized housing (even in new luxury buildings) not included in Social Services. I am not complaining about the first part of spending. It is the continuous expansion of social services and related increase in public employees with generous pensions.

Re: Brooklyn and Queens are undertaxed relative to Manhattan
The City can't really change the way it taxes Real Estate because it's based on NY State Law (which is odd because the way NYC taxes Real Estate is different than counties outside NYC, but that's the way it is). Manhattan pays the bulk of the RE Tax burden because:
1) Commercial properties pay the bulk and aside from the 2 airports all the highest value properties are in Manhattan,
2) Single family properties are the most under-assessed because of the 5 year/20% cap and the percentage of those is MUCh higher in Brooklyn and Queens, and
3) Multi-family properties are assessed based on Income and Expenses and rents are significantly higher in Manhattan (and aside from Real Estate Taxes, other expenses - like fuel costs - are not really location dependent, so not only is the gross higher, but the percentage of gross rent which hits the bottom line is higher.)

BTW as far as I can tell, the Real Estate tax on this unit is $4,325.71 a month.

30, You are right that it is more difficult to raise taxes for Single Family homes but city completely controls the valuations of condos and has been increasing the valuation to excessive levels which naturally creates excessive tax situations like this one.

Perhaps all the abatements given to the luxury condo market should be address. I would think millions are lost each year. And the developers, investors, etc walk away with those millions.

NYC doesn't completely control the valuations of condos. There is a formula controlled by the State as to how each tax class is valuated. Condos must be assessed as if they were comparable rental properties and those property's valuations are based on the owner's submitted I&E statements. So you can't have one valuation for new rentals which are collecting tremendous rents and another for condominiums which were built exactly the same. You also can't change the way those rental properties are valuated aside from based on their I&E statements.

On the other hand, Class 1 properties are valued a completely different way (based on comparable sales), but then extremely capped so that you can not increase the valuation by more than 20% over any 5 years period.

30,

1. There is a cap rate applied which was lowered a 5-7 years back and the rental calculations are inflated as condo apartments just do not rent at the same price as a rental building per sq ft. A 2 bed room rental is typically 1050-1100 sq ft and rents for 6k ($5.5 per sq ft per month) in a doorman building in a good neighborhood. A 2 bed room condo 1400 sq ft will not rent at $5.5 per sq ft per month. The city takes the rent per sq ft from smaller apartment and applies to bigger apartment inflating the valuation without providing schooling commensurate with the taxes. The city has a huge lee-way in rental calculations.

2. What is your reasoning for the taxes having gone by a much higher percentage (appx 15%+) than the rent increase in the last 3 years (barely increased or total 5-7%)?

3. There is large disparity in new condo taxes (no abatements). What explains that? 21 East 12st per sq ft is high where as many others are much lower (say 17 east 12th Street).

The property tax rates and methods are unambiguously skewed in favor of 1-3 family housing. 46% of NYC property values are in 1-3 family homes, and they pay 15% of the property taxes collected. The rental income method also significantly undervalues prime UES and UWS, because comparable rentals aren't at all comparable

There is no rhyme or reason to the condo tax methods, especially on 3-11 unit buildings. The taxes on my condo (no abatements, 110 year old building converted in the mid-1980s) rose from $11k/yr when I bought it in 2004 to $35k/yr in 2017. There is no rental math that can explain that increase (and we went through the challenge process 2 years ago using reputable professionals with rather immaterial success).

nyc, What is your tax per sq ft? I am appx $1 per sq ft in a coop in the village.

One of the reasons taxes have increased so much is that they are playing catch up and there is a lag. There is also a cap on Class 2 properties which is not nearly as severe as the one on class 1 properties, so the cap retards increases, but they show up eventually and even when you don't see increases in rents you still get RE Tax increases because they are always hitting the caps. The other thing that you don't see is that while market rents have not increased as much, you aren't just dealing with markets rents, but ALL rents for these buildings. Since there has been A LOT of turnover of statutory tenants to market rate the total rents on a lot of the buildings which are being used as comps have gone up way more than what you see when you read market reports.

As far as 17 East 12th St vs 21 East 12th St, an $8 million apartment at 17 East 12th St has a monthly RET of $4,592 and an $8 million apartment at 21 East 12th St has a monthly RET of $4,972 so as far as being ad valorem it's not really far off.

As far as "the rental calculations are inflated as condo apartments just do not rent at the same price as a rental building per sq ft" that's what I mean when I say the city doesn't have as much leeway as you thing. Condo assessments MUST be done as if they were rental buildings. That's what the State law says.

re:"There is no rhyme or reason to the condo tax methods, especially on 3-11 unit buildings. The taxes on my condo (no abatements, 110 year old building converted in the mid-1980s) rose from $11k/yr when I bought it in 2004 to $35k/yr in 2017. There is no rental math that can explain that increase (and we went through the challenge process 2 years ago using reputable professionals with rather immaterial success). "

You may be confusing taxes with assessments. Your taxes increased for 2 reasons: the assessment went up AND the tax rate went up. Also, did your building have any exemptions which expired? Because simply based on the cap and the rate increases, a 270% increase could be expected but not a 320% without an exemption expiring.

Well, 300, taxes on my Midtown condo are starting to push $1.20/sf, and it's arguably a less nice neighborhood than down where you are. But I don't know that we can cut social spending... and I don't think your plan to give the homeless a bus ticket out of town to "home" is going to work.

300, nice explanation of the way taxes work. It may not surprise you to hear that I was just in a continuing ed class where the instructor got it wrong...

ali r.

Ali, No doorman = Lower taxes as the rental comps are less expensive.

Good article on this topic. A little old but still relevant.
http://www.nreionline.com/finance-amp-investment/tax-grab-are-new-york-assessors-inflating-values-wrong-reasons

This is the leeway city uses to continue to increase the taxes. From Page 5.

https://www1.nyc.gov/assets/finance/downloads/pdf/brochures/class_2_guide.pdf

"We use statistical modeling techniques to assign estimated income and expenses to your property based on rental properties that are similar to yours in terms of size, location, number of units and age. "

I am in an east village, 7 floor condo building with 11 tax lots. The taxes are roughly $1 sq ft depending on whose perception of square footage is used. The building had no exemptions/abatements -- there was a modest J-51 abatement that expired in 1998. I did have the STAR exemption for a few years after I first purchased before it became income restricted. The YOY increases since 2010 have been pretty stark: 18/21/25/27/29/32/33/35K. Somewhere in here recently, probably the year where there was only a 1K increase, we "won" a challenge to the assessed value.

Mine went up 50% in the same time frame to $1 per sq ft without doorman.

The property tax portion of my maintenance doubled between 2002 and 2014 - was the last straw in my decision to leave NYC. Now, two and half years out of NYC, I am amazed to see that the cost of living continues to escalate...