2004-01-30 / Sports

The Rockaway Irregular by Stuart W. Mirsky

Tax Time Redux
The Rockaway Irregular by Stuart W. Mirsky Tax Time Redux

A0Last spring, I belatedly remembered to address the problem of real estate taxes here. Alas, by the time I did write, it was alreadyA0too late for Rockawayites interested in protecting themselves fromA0"assessment creep," and other assorted methodsA0our city bureaucracy uses to push upA0property tax bills, to do anything about it. "As sessment creep", of course, isA0a pro cess that goes on, year in and year out, whether the city is flush with cash or facing huge deficits.

It’s part of the nature of bureaucracy, of course, toA0perpetuate itself by pull ing in more and more cash to feed the insatiable monster of city spending. I suppose it’s human nature too, and part of the way of the world, since every creature wants to sustain itself and grow until it no longer can. Bureaucracies and the governments that breed them are no different. But it’s also part of our natures to want to hang onto what we’ve got. None of us wants to pay more for what we get, after all. And that’s especially true re: taxes andA0government. So in the in terests of reminding folks that they can and should fight the tax bills that will soon be coming their way, I thought I’d reiterate this year some of what I said about this last year.

Those of us who own our homes can expect to get a statement from the CityA0Finance Department in the mail shortly. This statement announces our preliminary assessment for the new calendar year and alerts us to a brief period (usually ending by March 1st) during which we can challenge the in creases proposed. (Rarely, if ever, does the Finance Department propose de creases, of course.) The statement we’ll be getting indicates the amount of in crease in marketA0and assessment value we can expect to see levied on our homes. It also showsA0how much our tax bill will go up and what our new bill is proposed to be.A0(The Finance Department reserves the right to finalize what they will actually bill us to later in the year.)

In past years, I haveA0found it useful to review this information closely since there used to beA0lots of discrepancies. I even managed to get my bill reduced a number of times through these efforts. More recently, unfortunately, this has become muchA0harder with the advent of computers, i.e., the Finance Department is more efficient in managing the data it uses so there are fewer errors to spot and contest. It’s also become a good deal harder to get hold of the kind of information one needs to successfully contest an as sessment nowadays since some of the old information you used to be able to find in the Finance Department’s offices (like recent sale prices of houses in our communities) is no longer made available to the public there. But this doesn’t mean it’s impossible to successfully contest a preliminary as sessment. Indeed, with enough of a head start, and if you know where to look, you could get lucky. (Since so much of this effort depends on obtaining information on recent sales in the neighborhood for comparable homes, local realtors can be helpful, as can neighbors and friends. In fact, a concerted effort by like-minded citizens working together and sharing information may actually yield a better result than can any one of us working alone!)

We’ve all heard by now that Mayor Bloomberg is talking about giving homeowners a property tax rebate to "reward" us for helpingA0the city in tough times. But we also know the tough times aren’t behind us yet! (The city’s economic recovery has lagged the nation’s, no doubt reflecting the in creased costs of doing business in a city where taxes keep rising, along with user fees, fines andA0red tape.) Given this, it’s unlikely the mayor will countenance an outright reduction of our property taxes as he should. So we’llA0have to work that much harder to look out for ourselves as the city’s agencies continue to spend inefficiently and profligately, demanding more and more of our hard earned money to feed their bureaucratic habit.

Now, in looking at the Finance De partment’s preliminary assessment, it’s important to remember that taxes are calculated based on the value of one’s home. SoA0FinanceA0routinely seeks toA0mark up real estate values in order to raise the ceiling on the in creases they can levy. Not only are we faced with the mayor’s past 18.5% property tax increase, which not even a one-time "rebate" can ameliorate for us going forward, the City is going to do everything it can to re-value our homes upward!

Last year, when I belatedly began looking into this, I noted that they had assumed my property’s market value had increasedA0by 79% over the preceding five years. This represented aA022% increase from the prior year’s estimated market value alone (2001-2002). While recallingA0thatA0property values had, indeed,A0increased in re cent years, reflecting the booming nineties andA0record low interest rates, I also noted that weA0had been in a weak economy since 2000. If myA0home went up by 79% in value over the prior five years, when three of those years were economically weak, what can I expect this year when the economy has actually been smoking and home sales booming? I haven’t seen this year’s proposed assessment from our friends at Finance yet, but I’m betting it’ll be a doozy!

I happen to live on a block where there are about 16 other houses of roughly the same size and configuration as mine, so this gives me an op portunity to do some "comparison shopping." Last year I took a look, on-line,A0at how these other properties fared in terms of Finance’s proposed assessments, to see if my own increase was an anomaly or not. (You can check this out yourself:A0go to the Depart ment of Finances’ website and review the "Assessment Roll" by searching your house’s block and lot number.)A0To my surprise some of neighbors did much worse than I did. The average percentage increase since 1999 for all these homes (including mine) was 84%, with seven showing an increase above 90% and one of these at 100%! In essence, Finance was estimating that our houses had roughly doubled in value over theA0preceding five years.

Of course, we’re not actually taxed on the market value of our homes but on something called "assessed value." Finance calculates this, basedA0on the estimated market value already referenced. This "assessed value" is the true tax base, the one they actually use in calculating what we owe. But remember that the higher the market value, the higher they can place your as sessed value!

As it happens, however, New York State law limits assessment increases for properties with ten or fewer units to no more than 6% in one year or 20% over five. So increasing estimated market values mainly works to raise the ceiling on future tax bill increases. Year over year increases are actually constrained by this State limitation.

Among the seventeen homes of comparable size and type on my block, I was able to find data re: assessment values going back to 1999 for sixteen. The average five-year increase for these actually turned out to be 23.1%, reflecting two homes which saw increases of over 50% and three with increases in excess of 20%, the legal cut-off.A0If the homeowners of these properties had delved into this and contested any increase above the five-year 20% limit, it’s possible they could have gotten their assessments reduced since the increases in these cases ap peared to be in excess of what is allowable by State law. But you have to look at the data and file an appeal within the short time period allowed in order to make this happen. If you never notice it, the increase may stand and then get built into your base for future years!

So, there are at least two things a concerned homeowner can and should look at: whether his or her property is being unfairly evaluated on the basis of market value (which establishes the future ceiling within which the city can raise his or her taxes) and whether the city is following the law by restricting any increases (calculated as a percentage of market value) to the 6%/20% rule. If you can successfully contest them on market values or rule violations, you can reduce yourA0property tax bill.

It may be that we won’t be able to get the property tax rate increase, that Mayor Bloomberg and our City Coun cil representatives brought us, rolled back until we can changeA0leadership in City Hall. But each of us can still make sure the City doesn’t overcharge us on our taxes or unfairly build room into our current tax structureA0for future unfair increases. We can only accomplish this by being vigilant when the proposed new assessment arrives in the mail and by doing the legwork needed to make sureA0the City’s not taking advantage of us. This time I’m writing early enough in the process so folks will be alerted beforehand. Good luck when the new real estate tax statement hits your mailbox. And don’t give up until you’ve looked at it closely enough to ensure they’ve got it right!


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