NY Daily News Discovers Property Tax Disparity in NYC
More expensive homes don't always have more expensive property taxes, according to a new report.
Logic would have you think that the more expensive your home, the higher your property taxes. According to a recent article in the New York Daily News, however, this is not necessarily the case in NYC. The newspaper enlisted the Independent Budget Office to analyze tens of thousands of property tax records in 135 neighborhoods throughout the city. The results turned up "wide disparities" in the NYC Finance Department's methodology for determining a home's market value — which is what determines a home's property taxes.
For example, the owners of a $462,000 two-family home in Cypress Hills pays $6,919 in property taxes. Meanwhile, the owner of a $2.5 million brownstone in the heart of Park Slope pays $6,209 — $700 less, despite being five times more expensive. According to the report, it's not uncommon for owners in upscale neighborhoods like the Upper East Side and Brooklyn Heights to be paying less than owners in areas with cheaper homes, poorer residents and higher crime rates, such as East New York.
So what's the root of the problem? It starts with tax assessments: Homes in more affluent neighborhoods tend to be assessed below their market values, while homes in poorer neighborhoods are assessed above their market values. Take East New York, where the median sale price is $249,000 — but the Finance Department deems the median home value at $394,000. Meanwhile, over in Park Slope, the city's estimated median value is $1.29 million — significantly below the actual median sales price of $1.42 million.
"The very first thing in any system is you have to get the market value right," a former Finance Department staffer told the paper. "If you can't get the market value right, the rest of the assessment system is compromised."