I am trying to understand property taxes in New York City (borough of Manhattan).

Some buildings seem to have very low assessed values. For example, a building might be listed in ACRIS as having a $12 million "market value", but then it will say "6-20% LIMITATION" value $150,000 and then announce: "your taxes are based on the assessed value", meaning the $150,000. How can a building worth $12 million have an assessed value of $150,000?

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    Common sense and law are not always in synch, especially when it is in a political donor's interest for them not to be. – keshlam Sep 24 '15 at 21:43

Simple google search brings this response:

6-20% Limitation -- The rule that assessments of Class 1 parcels may not increase more than 6% in a current year, or more than 20% over a five-year period. There is a similar rule for class 2, called the "8-30% limitation".

What it means is that the assessed value cannot increase more than 6% a year, even if the real market value did. For long term holdings this accumulates to quite a difference, as you've noticed.

  • MMM, nothing quite like capitalism mixed with democrazy! – Dave Sep 24 '15 at 23:19
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    @Dave It's about not forcing the retirees out from high property taxes. Many places that have experienced big real estate booms have similar rules. Around here such limits apply only to owner-occupied houses. – Loren Pechtel Sep 26 '15 at 3:02

To view and compare property tax history see https://tax.tidalforce.org/ Login and you can unlock the search by name and search nearby and search all condo and search payroll features. To compare property against the current nyc mayor use https://tax.tidalforce.org/#search/3010230033

See http://www.ibo.nyc.ny.us/iboreports/propertytax120506.pdf

For a direct link to the law section see https://www.nysenate.gov/legislation/laws/RPT/1805

Also see https://www.nysenate.gov/legislation/laws/RPT/305

This, in essence, says that the City of New York can continue to classify property and use their prior to 1980 assessment standard.

If you think about some consequences of this limitation to assessment changes which DOES NOT INCLUDE "improvements" you will see that strange results will follow.

Think about the Hurricane Sandy affected homes, the homeowner is assessed at a value A and then the storm hits, they fix their home and the "improvement" is B. The limit to the increase in assessed value of 6% does not apply to "improvements". Of course, the homeowner would probably not consider the "repair" an "improvement" but the real estate tax law does distinguish them.

This is a reason, we in New York State, had to pass a special law for Hurricane Sandy victims. If this seems strange, then consider this.

For details, see: http://timingblog.brooklynmarathon.com/2014/03/the-inequities-of-new-york-city-and-new.html

You move to an area and buy a home and you legally repair it with the proper permits. The home was in disrepair but the assessed value was still high because it appears NYC Assessor do not account for depreciation, only appreciation. You will receive a 100% or more property tax bill increase.

Consider another situation where you buy a home and you bid up the price to millions of dollars and the home was assessed at a low value before the purchase and you perform no legal "improvements". In this case, you will receive only a 6% assessment increase and a very small change in your tax bill.

It seems strange that depreciation is not accounted for in New York City and the purchase price of the home does not seem to directly affect the property tax bill.

Compare to Proposition 13 in California where the purchase price is the assessed value.

See http://openleg-dev.nysenate.gov/laws/RPT?location=1805-A#1805-A

§ 1805-a. Assessment of real property damaged by the severe storm that occurred on the twenty-ninth and thirtieth of October, two thousand twelve in a city having a population of one million or more. 1. Generally. Notwithstanding any provision of any general, special or local law to the contrary, any city having a population of one million or more is hereby authorized and empowered to adopt and amend local laws in accordance with this section to provide that the assessed value of affected real property, as defined in subdivision three of this section, shall be subject to the limitations provided in this section.

§ 305. Assessment methods and standard. 1. The existing assessing methods in effect in each assessing unit on the effective date of this section may continue.

  1. All real property in each assessing unit shall be assessed at a uniform percentage of value (fractional assessment) except that, if the administrative code of a city with a population of one million or more permitted, prior to January first, nineteen hundred eighty-one, a classified assessment standard, such standard shall govern unless such city by local law shall elect to be governed by the provisions of this section.

  2. Any assessing unit in which assessments are at full value by reason of a revaluation may adopt a level of assessment in accordance with this section.

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