Property Tax Proposal: Co-ops and Condos to be Treated like Homeowners
Brownstone Brooklyn and other high-end neighborhoods could see property taxes rise.
Jan. 31, 2020 — Commission has come out with its long-awaited proposals on tax overhaul.
The long-awaited preliminary report of the commission reviewing the city’s antiquated method of calculating property taxes was released today.
The 72-page report by the New York City Advisory Commission on Property Tax Reform proposes shifting more of the tax burden from low- and moderate-income homeowners and placing it on the owners of multimillion-dollar co-ops and condos in such neighborhoods as Central Park and brownstone Brooklyn. The proposals also include: lumping co-ops and condos in a new property class with one- to three-family homes and small rental properties; assessing the tax rate of co-ops and condos on their full market value rather than the value of comparable rental properties; doing away with the current co-op and condo tax abatement and with caps that have kept the tax bill on high-end properties artificially low.
“The report seems to focus on the inequities between an $8 million co-op on Central Park West and a $500,000 home in Laurelton, Queens, where taxes don’t reflect values,” says attorney Geoffrey Mazel, general counsel for the President’s Co-op and Condo Council, which represents more than 100,000 units of housing. “Switching to assessing properties based on their market value is logical on paper. Under these proposals, high-end properties will pay more.”
The inequities in the current system can be stark. As reported by the New York Times, a five-bedroom brownstone facing Prospect Park in the Park Slope section of Brooklyn is currently listed for sale at $8 million. But it has an extremely low assessed value, leading to an annual property tax bill of $20,165 despite its huge market value. By comparison, the owner of a ranch-style home in Fieldston in the Bronx would pay roughly the same in property taxes on a house with a market value of about $2 million. So would the owner of a $900,000 home just north of there, in Yonkers in Westchester County, according to tax records.
The fate of the commission’s recommendations is uncertain at best. The changes, which could affect 90 percent of all homeowners in New York City, would have to win approvals from the mayor, the city council, the state legislature, and the governor before taking effect.