Co-op owners in eastern Queens have been protesting huge hikes in their property-tax assessments, used to determine their annual property-tax bills from the city. In some cases, owners saw the assessed value of their property soar 147 percent, Crain’s reports.
The city's property-tax system has always been complicated – and historically resistant to reform. Condo and co-op buildings are assessed like income-generating rental buildings, so they are compared to nearby rental buildings. There was a large increase in value for Queens co-ops because assessment methods were improved this year. As a result, it was found that many properties were under-assessed in previous years, according to New York City Finance Commissioner David Frankel.
Appeals have become commonplace. The number of tax assessment appeals rose 6 percent this year, to 50,001, according to Glenn Newman, president of the Tax Commission, which reviews the Department of Finance's property assessments.
After admitting that the Queens co-op assessments were wrongly inflated, Frankel imposed a cap on assessed values that should limit property-tax increases to 10 percent this year. This tweak brings the Queens co-ops in line with Class 1 properties – one-, two-, and three-family homes – whose assessments, under a state law, can increase no more than 6 percent a year or 20 percent over five years. This cap has proven especially beneficial to homeowners in neighborhoods where values are increasing rapidly, and it has hurt those living in neighborhoods where the rise in values is more gradual.
City Comptroller John Liu has announced a coming audit of the tax assessment process. There is also proposed legislation that would put co-op and condo owners on a level playing field with single-family homeowners. And a group called Tax Equity Now New York has filed a lawsuit asking the courts to identify problem areas in the city’s method of assessing real estate.
Meanwhile, the Queens co-ops are considering a legal action of their own. Says Bob Friedrich, head of the Presidents' Co-op Council, which represents 50 local co-ops: “The valuation process is capricious and will destroy us.”
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