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New York Property Tax Reform: The Pressure Builds

Posted by Melvin Monachan | Feb 22, 2018 | 0 Comments

In 2017, a group of homeowners, renters, landlords and organizations associated with social justice and civil rights has formed a consumer coalition: Tax Equity Now New York (TENNY). This coalition was created to address inequities in the state's property tax system through a lawsuit. The group hopes to see some changes to what they believe is a largely regressive system of taxation that's been going on for more than two decades. They feel those with lower incomes are disproportionately taxed across the region, and they have the data to support that claim. The data identifies 15 community planning zones that have the highest rates of taxes, and the residents of these community planning zones are mostly African American and Latino.

But it's not just lower-income communities that recognize the inequities in New York's high property tax system. Early this year, billionaire Tom Golisano created a website named “Tax My Property Fairly”. Golisano has been outspoken in the past regarding the high New York property taxes and moved to Florida to avoid paying them. He still has some property that he owns in New York and is still interested in seeking reformation. In a recent interview with Syracuse.com, he cited an example that roughly 35% of 621 properties that sold in Onondaga County in 2017 were purchased at well below their assessed value, meaning homeowners were overcharged for taxes. Golisano is hoping that his efforts will reveal the inadequacies of the process for assessments and further educate citizens how to challenge those inadequacies.

Meanwhile, Mayor De Blasio stated his office is actively reviewing and reevaluating potential changes to the system of property taxes, which he describes as a “massive undertaking” involving both city and state law. According to Crain's New York Business, De Blasio vowed to develop "a more straightforward, more transparent, more consistent property-tax system for homeowners and co-op owners and condo owners. But we have to ultimately be revenue-neutral in terms of its impact on the whole city."

This process will involve tax reductions on some properties and increases on others, which is why many politicians -- according to Crain's New York Business -- have avoided the issue due to a fear of backlash by mostly white homeowners who benefit from tax incentives and property value caps passed in the 1970s and 1980s. During this period of what is known as "white flight," New York provided property tax incentives that included a program to reduce property taxes in return for restrictions on property assessments, i.e., properties could not be assessed more than 6% within the first year or 20% over five years.

But since that program began, the property values of many of these homes have shot up, but the caps have remained. Thus, billionaire Tom Golisano's beef with the property tax system: the value of his properties were capped and sold well below their actual value. The latter, however, is TENNY's beef with the property tax system: because these more affluent home's values remain capped, these residents are not paying their fair share of property taxes, leaving lower-income communities to compensate for it.

In response to these concerns, the mayor has expressed a desire for the city to correct the problem internally, rather than have a court ruling issued. It remains to be seen exactly what and how the mayor actually intends to approach and correct the problem when the "problem" is viewed differently according to the resident or property owner.

About the Author

Melvin Monachan

Melvin Monachan is the founder of The Law Office of Melvin Monachan, PLLC, a full service, real estate law firm representing individuals, investors and corporate entities in all aspects of real estate law. On the transactional side, Melvin represents purchasers and...

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