Condo / Co-op Quick Hits: How Big a Property-Tax Hike, Other Issues

Sharp Property-Tax Hikes Expected for NYC Co-op and Condo Owners

A few days ago, the Bloomberg administration released a preliminary assessment roll for the 2012 fiscal year. In general, property taxes are based on a set of complex laws, influenced by data collected by Department of Finance appraisers, that require cautious attention to detail.

In the new fiscal year, property owners can look forward to steep tax hikes attributed to higher market values. The report indicates that co-op and condo owners are expected to be the hardest hit as the City anticipates a rise in condo taxes by 9.6 percent and co-op taxes by 7.5 percent. All increases are scheduled to take effect in July as the new fiscal year begins. The changes, counting all residential property, including single-family and multifamily dwellings, are expected to bring in an additional $900 million in tax revenues.

Albany Considers Cap on Property Taxes

Governor Cuomo's plan for a cap on property taxes consists of proposing a limit on the total amount of property-tax dollars that could be collected annually by a school district or municipality by capping the increase in the local tax levy at two percent or the rate of inflation, whichever is less. Currently, New York State property owners are one of the most heavily taxed in the country. A report released in 2010 by the Tax Foundation, a nonprofit, nonpartisan group, ascertained that the median property tax in New York State was $3,755, compared with $1,917, which is the median in the general United States.

The Republican-led State Senate has already thrown its support for such a cap, and although members of the Democratic-controlled State Assembly have also voiced their support for the plan, it is likely to come with strings attached. Since rent-regulation laws and tax breaks such as the 421-a exemption are set to expire in a few months, many Democrats are already looking into identifying potential bargaining chips that could favor their constituents down the road.

Property-Tax Benefits Information Available Online

New York City property owners who wish to see if their property is receiving any tax-exemption benefits can use the city's online Property Tax Benefit Information page.  Available information includes description, classification, dimensions and different values of the property as determined by the Department of Finance. If there are any exemptions on record, the site indicates the type, calculations and duration of benefits remaining.

Jack Jaffa is the head of the real-estate consulting firm Jack Kaffa & Associates. Founded in 1998, it advises Fortune 500 corporations, financial institutions, investment funds, property management companies, law firms, developer groups and home and business owners.

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