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The A, B, C's of Property Tax Inequities

New York City

Tax Inequities
Dec. 19, 2017

In city councilman Steven Levin's district, which includes pricey Williamsburg, Brooklyn, the city levied $2,403 in property taxes for every $1 million in property value in 2017. That was the lowest ratio in the city. In councilman Andy King's Bronx district, where homes sell for much less, the city took $12,493 in property taxes for every $1 million in home value.

A diverse coalition of advocates and real estate interests known as Tax Equity Now New York (TENNY) released the analysis to show the wildly different property tax burdens shouldered by owners of co-ops, condos, homes, rental buildings and commercial properties throughout the city, Crain's reports.

In Councilman Ben Kallos' district in the Upper East Side of Manhattan, for example, single-family homeowners collectively shelled out $6,822 in property taxes for every $1 million of property value. In the same area, owners of luxury co-ops who received a tax abatement paid on average just $1,385 for every $1 million of property value.

"Do we actually think co-ops, after the abatement, should pay less than [single-family] homeowners?" asked Martha Stark, the policy director of the TENNY coalition and former commissioner of the city's Department of Finance. She is helping to lead a lawsuit filed by the group to force the city to dismantle the current system and create a new one – or let the courts do so. Other opponents of the current system complain that built-in caps on tax increases have racist undertones because they favor wealthy, predominantly white neighborhoods where values have increased rapidly in recent years.

Rental owners in Jimmy Van Bramer's Queens district, which includes lots of new development in Long Island City and pre-war rentals in Sunnyside, had the highest tax burden on average: $34,572 for every $1 million in property value.

TENNY's suit argues that these inequities violate the law, which requires similar property types to be taxed similarly, regardless of whether they are in wealthy or lower-income neighborhoods.

In addition to advocates such as Stark and former Chief Judge Jonathan Lippman, the suit has attracted a diverse roster of real estate firms whose executives have long recognized that there are also discrepancies in the taxation of different types of buildings, such as homes, rentals and commercial property.

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