New York City has announced that the total property tax assessment roll for the fiscal year beginning July 1 will rise tentatively to $796.6 billion, an increase of 0.12 percent.
For apartments, the assessment is going up 5.09 percent. For single-family homes, the increase is 3.97 percent.
“Assessed values went up for all classes of property, even in cases where market values declined because of State limits on assessment growth. When the market rebounds, owners will benefit from assessments that will rise more slowly than the value of their properties.”
So said Department of Finance Commissioner David M. Frankel in releasing the bad news yesterday.
His implication: If the increase hurts now, hang on. The way the assessment is averaged over time means that the plunge in prices over the last year or so will catch up with future assessments, ultimately lowering taxes.
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State law requires New York City to tax property on a percentage of market value, known as the assessed value. The law limits how much assessed values, and therefore taxes, can rise for homes and small residential properties in a given year.
In years following market growth, assessed values continue to rise even if market values decline, as is the case for fiscal year 2011, which begins July 1.
Overall market values, including new construction added to the roll, covered 1 million properties.
For 1-3 family homes (Class 1), which are based on comparable sales prices, overall market values fell 2.73 percent citywide compared with a 5 percent decline last year. Yet assessed values increased 3.97 percent.
Overall market values for cooperatives, condominiums and apartment buildings (Class 2) rose 4.04 percent, while the assessed value rises to 5.09 percent.
By law, the department is not permitted to use sales prices to value co-ops and condos. The values are based on income and expense data provided by property owners for 2008, the most recent data available when the roll is set.
The Finance Department made “certain adjustments” to the 2008 data to account for 2009 market conditions. The increase in market values also results from nearly 5,500 new Class 2 properties – chiefly condos – added to the roll this year.
Overall market values for commercial properties (Class 4) saw an increase of 2.14 percent, but, because of the addition of 14.5 percent of new space, the assessment jumps 4.99 percent.
For more detail on taxes and their affect on monthly costs, you may want to check my earlier post. And if you’re inclined to fight City Hall or simply shout at it, the department’s site offers a schedule of neighborhood forums as well as information about how to challenge individual assessments, a process best left to lawyers who specialize in the endeavor.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022