Is NY’s Property Tax System Even Legal?

Blog December 12, 2019 By Admin

New questions are being asked about the legality of NY’s property taxes. Are they even legal?

Property taxes only seem to be getting worse in NY and especially on Long Island. We know they aren’t cheap. We know they are broken. We know they are driving away businesses, investment, jobs and the next generation. Not enough has been done about this. Could a court order put a freeze on them? If not, what can you do to protect yourself now?

New Property Tax Debates

New property tax forums and round table events have been taking place in NY. In December 2019, two of these were led by state senators.

They’ve been investigating the tax system, how it is broken and the impact on businesses and residents.

One called the system a “monstrosity.” A former city finance commissioner said they are now unconstitutional and should be halted by a court order.

Why Aren’t Our Property Taxes Legal?

Without even diving into debates over corruption or an excessive burden of taxation there is one big reason why property taxes could be legally halted. Even if that is extremely unlikely to happen. It’s because it is knowingly flawed and almost 50% of annual property tax bills have been sent out incorrect each year.

This is something the government readily admits. They’ve even had to borrow billions of dollars to pay back those who have gotten help to appeal their property tax bills.

It’s not a reasonable margin of error. If it was 2% or even 8% or 12% each year that might be put down to flaws in the system. Something which could be improved on over time. Yet, when you intentionally and knowingly send out bills in which 50% of your customers are being 50% charged each year, that’s a completely different case altogether.

If you had a small business or your employer got busted for overcharging half of their customers every year, even once, you and they would be in big legal trouble, right?

There would be a criminal investigation. Someone would probably go to jail. Leadership would be changed out, or the company would be ordered to cease and desist business altogether.

Haven’t We Been Making Progress?

No. Those hosting these recent panels saw there have been no meaningful and positive changes or overhauls to this system for 40 plus years.

We’ve seen some token offerings designed to make us feel like we are getting something. Tax caps, a few hundred dollars in a tax refund. Or in the case of Nassau County, new tax assessments. Somehow we always just keep paying more in taxes besides all of this.

The $30B Puzzle

The sad news is that this is unlikely to change. NY has become heavily reliant on the $30B they charge in property taxes each year. That’s a lot of money and influence to keep the status quo.

Ironically other destinations seem to be doing so much better in innovation and business growth, because they don’t have these taxes. Think Monaco, Dubai, and even Saudi Arabia which just launched the world’s most valued company (even bigger than Apple). These are places where you actually own your own property and don’t just rent it from the government each year.

New York is worth saving and bringing back. We’ll hear a lot of people talk about wanting to change the tax system as we run up to the new election. For now, the one tangible thing you can do is to use Property Tax Adjusters, Ltd., to challenge your own property tax assessments and bills and stop being a complicit victim.