Why are NYC taxes so high?

out of control pensions

I think Giuliani almost eliminated the UBT (4% additional NYC income tax on the self employed) .. but instead it still lives albeit with something like a $100k? threshold. You're still screwed if you make over that amount ... and who doesn't if they want a decent living in New York?

Agree with nyc_sport in https://streeteasy.com/talk/discussion/43433-best-retirement-plans ... Florida is looking better and better. He says he paid over 52% of total 2016 income in state and local taxes (not including property taxes which adds another 7%+).

It just doesn't make sense. I like NYC and the west side bike path, Central Park etc. are great but is it worth almost three quarters of your next dollar of income?

More and more I think NYC is really only meant for the ultra wealthy or the very poor. Anyone in the middle trying to work or make an income gets royally screwed.

Here's a good article I found on why NYC taxes are so high and how this new tax bill affects us New Yorkers:

https://www.hauseit.com/nyc-real-estate-taxes/

I heard a friend say the other day that in NYC high income taxes subsidize low property tax rates (relatively). NYC property taxes are indeed a fraction of say what they are in NJ or Westchester. So the city squeezes folks basically who are working and can't leave?

Thoughts?

In general real estate taxes on Commercial properties subsidized Residential Properties and real estate taxes on apartment buildings subsidized one to three family homes.

Is it true that 1-3 family properties are subsidized? I thought that class 2 properties (10 unit or more residential?) also had pretty low tax rates, at least relative to the burbs?

JR, Do not forget the city income tax. So property taxes should be much lower in NYC relative to suburbs.

The biggest reason taxes are lower than the suburbs is that residential is subsidized by commercial.

30, Let us say you are buying at $3mm 1500 sq foot new/ish condo and your income is $750k to afford a $3mm condo. You may pay $2500 per month / 30K per year / 1% of market value in property taxes. You will also pay around $25k per year in NYC income taxes. So total $55k per year. Almost 1.8% of property price. So low property taxes in NYC are a fallacy when you include NYC income tax. That is not that different as a percentage from suburbs (I believe appx 2% of Market Value) and NYC schools are much worse than good suburbs. Also, there is a case to made that when the property prices are higher in a particular country, the taxes should be smaller percentage as the costs do not necessarily double if the property prices double in 10 years. The extent of subsidization of condos by commercial property is not what it used to be.

Class 1 (1-3 family) are the ones really being subsidized. I will leave the lack of spending controls in NYC for another thread.

Taxes are higher in Scandinavia but you get better services.

In NYC , Real Estate Taxes are not a "School Tax", so equating high RET with school quality is apples and oranges. Under DeBlasio the City budget has gone from $70.1 billion to $88.7 billion. Where should the money come from?

Schools are funded from a combination of Property and income taxes in NYC where as in the suburbs Property taxes fund it. That is why I am comparing NYC property tax + Income Tax to Suburbs Property Tax.

I will leave why the budget is going up for another thread. If you are curious look up "all other" category in NYC budget which is growing the fastest.

http://www.ibo.nyc.ny.us/fiscalhistory.html

Another $400+ billion which will have to be funded somehow. It appears NY State's half will be funded by the proposed surcharge on For Hire cars (although I'm not exactly sure how that actually represents a contribution from the State). Where will NYC's money come from?
https://www.amny.com/transit/mta-subway-funding-1.17789464

At what point will they decrease spending?

Over history, do taxes just keep going up until there is a fiscal crisis like the mid 1970's in NYC? On the eve of bankruptcy?

I hear there are something like 10,000 people in NYC who pay almost all of the taxes. If they leave it's game over.

I think there is a symbiotic relationship between the people who pay the highest share of taxes and their need to stay in NYC in order to keep creating all their great wealth. But for those that are retired or nearing retirement, leaving NYC is an option that many will choose if quality of life here continues to decline. Then we may indeed face a crisis of some kind.

NYC needs to completely revamp their tax system to better balance its needs vs. its means with an outlook for the next 20-30 years. I foresee local income taxes increasing to make up for the reduction in federal collections as well as the addition of user fees for the many people from outside of NYC who use the city streets and other services without having to pay for them. Also, lets completely revamp the incredibly unfair real estate tax system which encourages lower tax revenues from those who can afford to pay more e.g. wealthy townhouse and coop owners.

Ximon, I do not think coops in Manhattan are low any more. The city has been aggressively increasing the taxes.

Ximon, On retirees, they can only afford to live in NYC if their apartment value is small (say 35-40% max) relative to their net worth as their apartment taxes are sure to go up whether the value goes up or not.

300, whether apt. values as a percent of net worth is small or large, if taxes continue to increase while quality of life continues to decline, many retirees will increasing decide that living in NYC is a choice they need not make. But yes, some will stay regardless either because they have strong ties or more money than they need.

On coops, I would love to see what equalization rates (ratio of taxable value to market value) or effective tax rates (taxes paid as a % of market value) are for various types of real estate in NYC. My gut tells me that coop owners are treated better than most other home owners but I could be wrong.

While I don't have any numbers to back this up, my gut feeling is that coop taxes have been creeping closer to condo taxes.

That's why I tell my condo board that just like taxes, common charges never go down. So let's stick to fiscal discipline and one off assessments if something needs to be done.