What will my New York City property tax be in the future with current law?
Assuming no changes in the current property tax law and the market value of the property does not plummet. These are important assumptions.
Let's start with a property tax of $12,418.96 (just a random value)
The current NYC property tax law S7000A allows for an effective 4% increase per year over a five year period.
Therefore we set the growth to 4%
There is an interest rate site that charts this. Although this is not interest that we are earning, it is effectively the same process in reverse. NYC is earning this interest from us.
Property Tax Growth
After 50 years with no other changes, the property tax will be $88,257.62
Navigating the Maze: A Look at NYC Property Tax Growth
Property taxes are a significant expense for New Yorkers, and their growth can have a major impact on household budgets and the city's overall economy. Understanding the trends and factors driving property tax growth in NYC is crucial for both homeowners and policymakers.
Rate Adjustments: In September 2023, the NYC Council amended property tax rates for fiscal year 2024. The new rates show a slight decrease for commercial properties (Class 4) and a notable increase for multi-family residential properties (Class 2). This shift aims to balance the tax burden between different property types.
Assessment Increases: Property assessments, which determine the taxable value of a property, are also subject to change. Recent years have seen significant assessment increases, particularly for co-ops and condos, leading to higher tax bills for many homeowners.
Impact on Affordability: Rising property taxes can exacerbate affordability challenges in NYC, especially for low- and middle-income residents. The NYC Comptroller's report, "Growing Unfairness: The Rising Burden of Property Taxes on Low-Income Households," highlights how property tax burdens have grown faster than income for low-income households, putting further strain on their finances.
Factors Driving Growth:
Rising Property Values: NYC's real estate market has seen consistent growth in recent years, pushing property values higher. This increase in value translates to higher assessments and subsequently, higher property taxes.
City Budget Needs: Property taxes are a major source of revenue for the city, funding essential services like education, sanitation, and public safety. As the city's budget needs grow, property tax increases may be necessary to maintain service levels.
Policy Changes: Policy decisions, such as tax abatements or exemptions, can also impact property tax growth. Recent proposals to reform the property tax system could lead to further changes in how taxes are assessed and collected.
The future of NYC property tax growth remains uncertain. Continued economic growth and rising property values could put upward pressure on taxes. However, policy changes and initiatives aimed at promoting affordability and fairness could help mitigate the burden on taxpayers.
Key Considerations for New Yorkers:
Stay Informed: Understanding property tax rates, assessment trends, and potential policy changes can help New Yorkers prepare for future tax bills.
Explore Options: Homeowners facing significant tax increases may be eligible for exemptions or abatements. It's worth exploring available options to reduce the tax burden.
Advocate for Change: Engaging in civic discussions and advocating for policies that promote affordability and fairness can help shape the future of NYC's property tax system.
Navigating the complexities of NYC property tax growth requires ongoing attention and informed action. By staying informed, exploring options, and advocating for change, New Yorkers can work towards a more equitable and sustainable property tax system for the city.
NYC Department of Finance: https://www.nyc.gov/site/finance/taxes/property-tax-rates.page
NYC Comptroller's Office: https://comptroller.nyc.gov/
NYC Advisory Commission on Property Tax Reform: https://www.nyc.gov/site/propertytaxreform/index.page
I hope this article provides a helpful overview of NYC property tax growth. Please let me know if you have any questions.