When the city of New York assesses the value of a condo for property tax purposes, the first line is the ESTIMATED MARKET VALUE. This number may or may not determine the property taxes owned (depending on the "8-30% limitation - AV" kicks in). Nonetheless, my question is how this ESTIMATED MARKET VALUE is computed, not how the whole tax bill is computed.
Here is an example of what an assessment might look like (on an apartment where property taxes depend on the 8-30% limitation - AV):
The city's web site says that for class 2 properties (which includes condos)
The Department of Finance estimates a market value for your property based on its income producing potential. We use statistical modeling and assessor reviews to estimate income and expenses for your property based on rental properties that are similar to yours in size, location, number of units, and age.
Unfortunately, I can't find any more information about this modeling process or even what it is supposed to measure.
This bloomberg article describes the process as follows, however:
- For every condo building in New York, the city identifies a comparable rental building. A condo-comparable rental building means an apartment building with units of a similar number, size, age, location, and so on.
- Using this rental building's (real) rent roll, the Department of Finance extrapolates an (imaginary) income statement for the condo building. The condo board decides the portion allocated to individual units.
However, even if true, this still doesn't tell me how to figure out which comparable rental building has been assigned to a particular condo. Nor does it explain how the income is turned into an estimated market value. After all, these estimated market values are much higher than annual income for a building--typically they seem to be around 60-80% of the resale value of a condo.
Any more precise explanation of the process or how to find out more about the calculation on a particular building would be appreciated. In particular, I'm wondering how one can appeal an estimated market value that is too high, since I don't even know what the number is truly supposed to represent.