How will a new period of stagflation impact your taxes and properties in NY?
Expectations of a pending recession have now turned into warnings of a new period of stagflation. This is an economic situation which is far more feared by all than a simple recession.
How is it different? What could it mean for your property in NY, and your property taxes?
Stagflation Vs. Recession
A recession is a period of economic decline. Normally seen through declining GDP, lower economic activity, poor corporate performance, and a dive in the stock market and other asset classes. Unemployment rises, jobs are hard to get, and wages go down.
Given the decline in the economy during the first three months of 2022, we could already be in the midst of one of these periods. It won’t officially be called until the data from the second quarter of the year is published.
Stagflation is more feared, because it not only brings the same stagnating or decline in the economy and wealth and earnings, but is also coupled with high inflation.
Instead of being temporary as earlier claimed, high inflation is now expected to last into 2023.
In a nutshell, you’ll make less, lose more money, and yet pay a lot more for everything while this lasts.
The Economic Downturn
Not only have we seen the economic downturn begin in general economic data, but it is showing up in 401ks, the stock market, and real estate too.
Bitcoin already fell by 50% from its peak. Big companies like Netflix and others have seen their stock prices tank, and have started some big layoffs. Demand for gas may even be dropping due to high prices, which will impact energy companies.
Interestingly, after getting big tax breaks for coming to NY, the Long Island Business Network reports it is beginning to lease out its warehouses to other companies as even online shopping has begun to decline.
More home sellers are cutting their prices, and home values have already fallen 10-15% in some cities.
It’s hard not to see inflation everywhere today. You may now pay around $3 for a candy bar, versus less than a dollar last year. Electric bills in NY are forecast to rise another 12% this summer. Insurances are going up. Of course so is the cost of any home maintenance. Interest rates on debt and adjustable rate mortgage loans are rocketing.
Even if property prices keep falling, expect inflation to be a new excuse to keep jacking up your business and residential property tax bills across NY and Long Island over the next two years.
Finding Property Tax Relief
The time to get help is ideally before you are in a financial crisis. Wealth and income is likely to continue to decline for the majority over the next year, and beyond. While expenses are rising across the board.
Chances are that you are already being overcharged for property taxes. Your tax assessment is quite likely flawed. Now is the time to get help challenging and fixing that, to balance your finances, and stay ahead.