New York’s Governor recently laid out his plan for the state for 2021. More tax hikes are certainly on the table, as well as reinventing property uses.
New York’s Governor Cuomo has made it clear for months that higher taxes are coming. That may include both higher state income taxes, sales taxes and more. Other announcements in the governor’s recent state of the state address are also likely to trigger even higher property taxes too.
On the bright side, the governor has said that in addition to eviction moratoriums on residential rentals, he will also codify an eviction moratorium for commercial tenants at least through May 2021. That may help some to keep their premises until then, but without a lump sum of cash in the bank to pay all of the missed rental payments, that may do little to keep most businesses alive. Especially with ongoing shutdowns.
While there certainly seems to be an enormous amount of distress in real estate markets behind the scenes, the mainstream media keeps pushing the narrative that the NY housing market has never been strong. According to the Long Island Business Network more than 30% more homes were put under contract in Suffolk and Nassau County in December 2020 than the previous year. Spikes in house prices are only going to lift tax assessed values and annual property tax bills.
The governor says he is also paving the way for developers to redevelop the massive amounts of NY office space and hotels which are no longer in demand. Going forward it is believed that as little as 30% of office space may be needed. In turn that is going to impact the demand for nearby hotels, restaurants, and other businesses. Retail has also certainly changed for good. He plans to allow these properties to be creatively repurposed into additional housing. A plan that could add a lot more supply. With the recent and ongoing huge exodus of residents from NY, NJ and CA it may be questionable how much more inventory is needed. While, on one hand, having more supply than there is demand can lead to lower prices, new construction properties invariably get priced at or above the peak of the market. Those properties typically enjoy years of tax breaks, and then have the impact of pushing the tax bills on surrounding homes and condos.
Be sure you are keeping an eye on your property value, how your tax assessment is being impacted, and how much your bills are going up.