Property Tax Hike Hits Homeowners Hardest
Homeowners of one-, two- and three-family houses in New York City may face a 4.3 percent hike in the property taxes they pay, according to reports in several media outlets. The tax rate increase, retroactive to July 1, would show up on bills due in January if the increase is passed by the City Council.
Rates for other residential properties—condos, co-ops, and rental buildings—are expected to rise by 1.5 percent. In contrast, taxes on office buildings would decrease by about 2 percent. The property tax rate is required by state law, due to rising home values.
Three years ago, in 2002, property taxes were raised by18.5 percent in order to help close the city budget gap. For the past two years, homeowners have been the beneficiaries of a $400 rebate on their taxes to ease the pain of the 18.5 percent property tax increase that the booming real estate market has brought about. In the present case, officials of the city Department of Finance say the 4.3 percent increase is not intended to raise tax revenue, but rather to bring about an accurate assessment of property values. Whether the $400 cushion will still show up on the property tax bills set to go out in January that will show the effects of the tax increase has not been specified at this time.
Whether or not the property tax increase is, indeed, intended only to reflect accurate property assessments remains to be seen. To us, however, the news of the increase is cause for serious concern.
The city defines four classes of property: homeowners, condominiums, utilities and office buildings. Taxes for those properties have to be adjusted to reflect the share of market value every year, in accordance with state law. Only Class 1 properties—one-, two- and three-family homes—seem to be showing the greatest increase in the taxes levied on them.
The people who live in Class 1 residences and pay property taxes on them are the backbone of this city. While we readily grant that property taxes, along with the other taxes exacted on every individual living in New York City, are the necessary price one pays for living here, it seems considerably less than fair to make homeowners pay the lion’s share of those taxes, especially when a homeowner selling property will have to pay a transfer tax even as the buyer pays taxes on the purchase. Fifteen years ago, then Council Speaker Peter Vallone Sr. brought about an equitable tax plan that enabled the city to pay for his Safe Streets, Safe City program. Middle-class homeowners, among many others, chose to stay in a city that became the safest in the country and pay for the privilege. They showed their faith in New York City as the place where they wanted to live, work and raise their families—future generations of New Yorkers. What’s more, City Councilmember David Weprin, chair of the council Finance Committee, points out that the increase will hit older homeowners, many of whom are on fixed incomes, especially hard. It seems to us ungrateful on the city’s part to repay homeowners’ conviction and resolve with a substantial property tax increase.
Sam Miller, Finance Department assistant commissioner, maintains that the assessment is intended to ensure that assessments reflect the market. He calls the assessment and the concomitant hike “accurate”, rather than “super aggressive.” We hope he’s right, but we’re not convinced. Neither, we’re sure, are the city’s homeowners. There are other, better ways to address the city’s financial straits. We urge the Finance Department, the City Council and the mayor to find them.