NYC Property Tax Reform

Everyone sends NYCDOF a check for 1% of their Zestimate (TM) each year.

Mi just gave it a quick skim but it seems like high end Coop and Condo owners, as well as long-term unrenovated property owners are going to be shocked at increases. Also, it's going to take huge increases in a lot of Brooklyn to equalize ad Valorem with Manhattan properties.

In terms of how it would structurally work for Coops, the only way I can imagine it happening is that they will take the most recent sales of units in the building and extrapolate from that. Since there is a good chance that these will actually be the most valuable units in these buildings this could easily prove to be a disaster for both holders of unsold shares and original purchasers/long term, unrenovated unit owners who may be on fixed incomes.

https://www.brownstoner.com/real-estate-market/nyc-property-tax-reform-mayor-commission-brooklyn-brownstones-coops-dof-report/

Just another wealth and income tax. Socialism run amok

I don’t see this as another wealth and income tax. When the wealthy are paying less property taxes than people in poor neighborhoods, that indeed is socialism for the wealthy and rugged individualism for the poor. But this is the story for the rich in general.
Of course I am affected by this myself in a negative way but at least I can be objective about the subject.

(1) Altering the rate of tax based upon income just makes this another income tax
(2) What does "paying less" mean? Is someone paying $5k/yr for a 400 sq ft studio paying more or less than someone paying $3k/yr for a 2500 sq ft house in Queens? There is no logic to comparing the tax vs market values in entirely different markets.
(3) The property tax serves nothing of its stated purpose, but is just another teet that the NYC sucks for general revenues. $30 billion in property tax revenues last year, up from $8.4 billion in 2000.
(4) If you engage in practices that will serve only to reduce property values, the whole idea is backwards

Let me add me more.

5. Should the property taxes collected be spent by zip code as least by adjacent zip codes or by school zoning?

Fixing typo. Let me add me more.

5. Should the property taxes collected be spent by zip code or at least by adjacent zip codes or by school zoning?

I found the following from WSJ pretty uplifting.

———

When most people think of Oxford, what comes to mind are images of bright minds debating quantum physics or the existence of God. But even the brainiest sometimes need a lesson in common sense.

That’s exactly what the bursar at St. John’s College—the most richly endowed college at Oxford—delivered when he responded to students occupying his 15th-century quadrangle and refusing to leave until the college divested its oil-company shares. The students want the college to sell the more than $10 million of its endowment now invested in Shell and BP, and they want it now.

The Times of London reports that bursar Andrew Parker made them a counteroffer. “I am not able to arrange any divestment at short notice,” he wrote. “But I can arrange for the gas central heating in college to be switched off with immediate effect. Please let me know if you support this proposal.”

The idea that the students themselves make a fossil-fuel sacrifice did not go over well. One protest organizer complained that Mr. Parker was being flippant, noting that “it’s January and it would be borderline dangerous to shut off the central heating.” Another suggested Mr. Parker was being provocative.

Again the bursar responded with wisdom: “You are right that I am being provocative but I am provoking some clear thinking, I hope. It is all too easy to request others to do things that carry no personal cost to yourself. The question is whether you and others are prepared to make personal sacrifices to achieve the goals of environmental improvement (which I support as a goal).”

Surely a worthy lesson applicable far beyond the colleges of Oxford.

"There is no logic to comparing the tax vs market values in entirely different markets."

Except for the fact that it is mandated by law that this is how property taxes are to be collected (Ad Valorem). It's why there is at least one pending lawsuit against the city, and several past settlements on various complaints arising from that issue, and was the impetus behind empaneling this commission. So one way or another something has to be done, even if that thing is changing the law to suspend Ad Valorem taxation (although that in itself would probably be tough considering that's they way it's done everywhere else).

300, I don't get how that story is related BUT I love that story and will tuck it away for future reference.

The irony of the proposal is that it will most likely backfire on many of its proponents. Like New York State Senator Brian Benjamin and others in rapidly gentrifying neighborhoods: since the proposal will raise taxes in those neighborhoods, long term residents with low incomes and low basis will be pushed even harder to move. This may make those neighborhoods slightly less attractive to "gentifiers" but I think the pressure will be greater on the aforementioned group.

Jas, People who cry that rich do not pay enough taxes do not typically want to pay more taxes. Buffet for example is free to write in additional federal taxes on his tax form. Tom Stayer can house all homeless on San Francisco so that they do not sxxt on the street.

And people in public housing or inclusive houses cry that wealthy do not pay enough taxes!! I know it is not practical and will not happen but how about separating Manhattan below 96th street (or there about) from the other boros. You can certainly keep taxes ad valorem after that.

That way people in Manhattan below certain street can make sure that all public schools in that area are indeed top notch as the money is not going to subsiding other boros.

Oh, sure.... All of NY State legislators who would have to vote on this would be perfectly happy to go along with the concept that all tax money should be spent where it's originated from.

I posted “the separation of Manhattan below certain street” to show how morally valid is nyc_sport point #2. Ad Valorem works well for smaller areas but not for a city as large as NYC.

The "ad valorem" doesn't answer the question. In every other part of NYS, taxes are not even levied on county basis, but on town, village or even separate school district within the same town bases. If NYC equalized its taxes even on a county basis, that would still cast a far wider net than any other part of the state. Think what the folks in Westchester or Nassau -- with 1/10th the population -- would do if you equalized tax rates across the entire county. But there is nothing at all stopping the city from separating the counties (i.e., boroughs) into lesser tax districts. But I am not even suggesting that, or that a $2,000/ sq ft Manhattan apartment should be taxed similarly to a $200 sq ft house on Staten Island. Properties in each borough (i.e., county) can be taxed at rates per $$ that reflect a fair contribution.

Because there is no chance that anyone's assessed taxes (putting aside the income adjustments) are going down, this supposed "fairness" reallocation will reallocate nothing, but simply raise taxes dramatically on (a) recently gentrified areas, and (b) prime Manhattan. And, to be clear, I am not even likely to be one of those harmed greatly by these changes, as I already pay $40k/yr in property taxes.

Sport, Thank you for articulating the issue and how it is possible to subdivide. I am in the same situation property tax wise. I already pay close to 1 percent if not 1 percent.

How do you think the tax rates are calculated each year?

BTW if this were actually to be implemented (which I highly doubt it will be) on the whole there would probably be a shifting of the tax burden away from a lot of Manhattan Coops & Condos and towards Brooklyn. There would also be a shifting towards higher priced Coops and Condos. For example taxes on the $238 million penthouse at 220 Central Park South would probably quintuple, and Coops like 820 5th Ave could go up by over 1,000% (the current "Market Value" for 820 5th Avenue is listed as $35,751,000, but you've got unit #3 listed at $50 million and the last 2 sales back in 2009 at $33 million and $40 million).

300, what do you mean 1 percent? Taxes on my midtown Manhattan studio condo are going up, again, and it looks like the new number will be $800 a month, so that's starting to push 1.5%. Everyone crowing about how amazing Brooklyn is can feel free to start paying more taxes as far as I'm concerned.

BK indeed needs to pay more tax. Especially townhouses. Manhattan is already paying much more than fair share.

Ali, Taxes are lower for non-doorman buildings in general as rent equivalent is lower per sq ft.

End result will be bickering among the 1-99% while .01% keeps their preferred carried interest tax rates and the like.

I am always surprised that neither democrats and not republicans have limited carried interest. The same for ability to step up basis on death.

I'll ask again:
How do you think the tax rates are calculated each year?

300, just like the carried-interest loop-hole, the bulk of the step-up basis advantage is enjoyed by a small but powerful percentage of Americans. (To belabor a point I'm sure you appreciate) It seems like such an easy place to look for much-needed revenue from both sides of the aisle, but then again, seems like the voters aren't the constituency the legislatures are looking to please. Just kick the can down the road and keep the donor money coming in the door.