The new tax law overhaul which passed the House vote in mid-November 2017 could burden Suffolk and Nassau County residents with $2.5B in extra taxes according to the Long Island Association.
While there may be some winners under the new tax plan such as small business owners who rent modest properties, don’t live in states like NY that have state taxes, and who have lots of kids, many New Yorkers are going to be paying more taxes each year. The new assessment by both Republican and Democratic representatives is that the new rules will cost Nassau and Suffolk residents billions more in taxes, every year. That is primarily due to not being able to deduct state and local taxes on their federal income tax returns. Effectively leading that income to be double taxed. This part could just be the tip of the iceberg of the tax hit local homeowners are going to be hit within the next few months. While the current proposal does not completely eliminate the deductions for property taxes and mortgage interest, it does severely limit them. The average Long Island property owner will be paying more in taxes each year due to the loss of these deductions. The push back against the tax plan by states which still charge their residents state income taxes just wasn’t enough to stop it. A logical way to even the playing field and keep New York competitive would be to scrap state income tax. Of course, no one in power is likely to want to do that. Another alternative to try and find some fairness in property taxes in California, is a proposal that would exempt those who do not have children in school from paying school taxes, within their property taxes. As we know, that is a large chunk of our property tax bills on Long Island. That could save many homeowners thousands of dollars a year. It would also put extreme pressure on schools to change the way things are done. Most of these solutions are going to face substantial resistance. The one thing every homeowner can do right now to have a direct impact on lowering their taxes each year is to challenge their bloated property tax bills. It’s the one place you can get substantial and fast savings. Some of which may help to offset other tax increases for those who decide to stick it out in NY, despite the cost.