New York City Real Estate Taxes Are the Unfairest of Them All

Since reforming New York City’s lopsided and unfair property tax system has proven “too political” for several generations of politicians – including the current mayor, Bill de Blasio – a group of activists and landlords calling itself Tax Equity Now has filed a lawsuit asking the courts to force reform. The group includes the giant landlords Durst, Related, and RXR, and its pet peeve is that one-, two-, and three-family homeowners enjoy a massive tax advantage over apartment dwellers, including co-op shareholders, condo unit-owners, and renters.

Now, as Crain’s reports, the Lincoln Institute of Land Policy, a Massachusetts-based think tank, has issued a nationwide comparison of property taxes, and there can no longer be any argument that New York City’s system needs to be changed – unless, of course, you happen to own a one-, two-, or three-family home.

According to the study, New York City has by far the nation’s largest discrepancy in tax rates between homeowners and apartment dwellers – with the latter paying nearly five times as much as the former. In the second worst city, Charleston, South Carolina, the disparity is 3.72. This is the 12th straight year New York City has topped this ignominious list.

Not surprisingly, New York City also has the nation’s highest tax rate on apartments, based on $600,000 of property value – 5.47 percent compared to runner-up Detroit’s 4.97 percent. Since co-op and condo tax assessments are pegged to neighborhood rents, the high rents that result from high taxes on rental properties are reflected in the inflated tax bills that go to New York co-ops and condos. Only Detroit surpasses New York City on its taxes for commercial properties.

Mayor de Blasio, who is enjoying a comfortable lead in the polls and his highest job-approval ratings, has expressed a desire to postpone discussion of property tax reform until after the November 7 election.