An empty New York City, with high unemployment and low visitor rates is reducing the value of local properties. Will your property tax bills also go down as they should?
NY Property Taxes
Bloomberg reports that annual property taxes are a $500B a year business for the US. That’s just the annual revenues they bring in.
NYC alone has been bringing in around $30B a year in revenue, just from annual property tax bills. That doesn’t include other real estate related taxes or income taxes.
The largest portion of those bills come from school district taxes.
Annual property tax bills are determined by both tax rates and the tax assessed values of properties.
New York’s Falling Property Values
Manhattan saw 40% of its population flee shortly after COVID restrictions went into place. Businesses have increasingly been folding in favor of letting people work from home indefinitely. The New York Times reports that even hotels have been struggling with occupancy levels as low as 29%. Unemployment has been around 20%, with 500,000 New Yorkers still out of work and growing. With new mandates, people can’t work here, and don’t want to visit.
Values of commercial buildings have already fallen by around 16%, probably a lot more. Morgan Stanely wants the Fed to burst the bubble with higher interest rates, and bring things down a lot further. Based on previous crashes, that could see property values down by 60% or more in the near future.
Fears are that existing declines would theoretically remove $2.5B in revenues from property tax bills over the next year. Of course, expenses should be down much more than that as well.
The Broken Property Tax System
Of course, just because you should be entitled to a 16% to 60% break on your property tax bills doesn’t mean you should except that break to voluntarily show up in your mailbox.
The NY comptroller says values haven’t gone down in 20 years.
We already have issues with unfairly issued bills. One Brookly condo reportedly worth over $2M only gets an annual property tax bill of $157. This inequity means others are picking up the tab. As will more of those who stay be picking up the tab for all of the empty properties being left behind.
Still school districts are demanding more money, while blocking tax saving opportunities. Such as in Freeport, where they are trying to block a property sale to Amazon which could bring in $40M, create hundreds of new jobs, and save local property owners an enormous amount of property taxes.
In Nassau County, some may be getting $375 checks in the mail to help. Yet, that likely doesn’t even account for half of the money that the county received in federal funds. And bills are likely to go up by at least that much.
You’d think it would be more efficient and financially wise to save money on the extra mail and labor, and just fix our bills fairly. Unfortunately, there seems little motivation to do that.
So, whether a huge break is warranted or not, a correction in your bill is not likely to just be handed out. You can still be entitled to it. Property Tax Adjusters Ltd. can help you correct your tax assessment and get you the savings you deserve.