December 29, 2021
Report recommends probably the most important modifications to New York Metropolis’s property tax system in 40 years
NEW YORK – The New York Metropolis Advisory Fee on Property Tax Reform at the moment launched its last report with suggestions to create a less complicated, clearer and fairer property tax system. The ultimate report, entitled “The Highway to Reform: A Blueprint for Modernizing and Simplifying New York Metropolis’s Property Tax System,” recommends sweeping modifications to the present system, with a selected emphasis on smaller residential properties which the general public and material consultants most frequently cite as having the best inequalities.
The last report expands on the preliminary suggestions launched on January 31, 2020 and particulars focused proprietor aid packages that may assist low- and moderate-income householders higher afford their tax payments. The report marks the first top-down evaluation of the property tax system by a government-appointed fee since 1993. It may be discovered right here.
“I am happy to current the ultimate report of the Advisory Fee tasked with reforming the Metropolis’s property tax system. I want to thank the members of the fee who spent the final three years diligently working by means of the myriad points concerned. Hopefully, this report will function a blueprint for the state and metropolis legislative our bodies to take this lengthy wanted reform to enactment,” mentioned Fee Chair Marc Shaw.
The Fee’s work was briefly disrupted by the pandemic, nevertheless it resumed in 2021 with an extra 5 public hearings to solicit enter on the ten suggestions within the preliminary report. The general public’s suggestions was instructive for the Fee in growing its last suggestions, which concerned stripping the system of the options that result in inequities and reconstructing it to align with a set of fundamental rules that prioritize focused aid for main resident homeowners.
The Fee’s strategic strategy centered on first establishing the right combination of structural modifications to realize horizontal fairness, the precept that comparable properties needs to be taxed equally, after which layering on proprietor aid packages in keeping with the longstanding ability-to-pay precept. The end result is a system design that may assist guarantee low- and moderate-income homeowners have inexpensive tax payments and first residents usually are not displaced from neighborhoods that they’ve referred to as house.
The Ultimate Report contains structural modifications that might make the system extra equitable and comprehensible by:
- Creating a brand new tax class for small residential property homeowners: 1-3 household properties, condos, coops, and 4-10 unit rental buildings, making certain that guidelines are utilized uniformly no matter property kind;
- Valuing property on this new residential class based mostly on sales-based market worth, thereby ending the statutory requirement to worth coops and condos based mostly on comparable rental buildings;
- Ending fractional assessments which differ by property class and confuse property homeowners;
- Eradicating assessed worth (AV) progress caps, widely known as one of many main drivers of inequity, and phasing in market worth modifications over 5 years as an alternative;
- Changing the difficult class shares system with a easy, extra clear system the place particular person tax class charges are fastened for five-year durations, until intentionally modified by the Metropolis Council and the Mayor.
Suggestions additionally embrace focused aid for main resident homeowners to assist them higher afford their tax payments, together with:
Homestead Exemption: A flat price or graduated price partial exemption is really helpful.
- Flat Fee Exemption: Main residents with incomes beneath $375,000 would obtain a 20% property tax exemption based mostly on sales-based market worth. These with incomes between $375,000 and $500,000 would obtain exemptions between 4% and 16%.
- Graduated Marginal Fee Exemption: Main residents with incomes beneath $375,000 would obtain an exemption of as much as 30% based mostly on their house’s sales-based market worth. The exemption would lower for higher-valued properties and, for these with incomes between $375,000 and $500,000, the exemption could be additional diminished.
Circuit Breaker: Along with the homestead exemption, a tax abatement for many who are tax-burdened, with incomes beneath $90,550, is really helpful.
- Main residents with incomes beneath $90,550 who pay greater than 10% of their earnings in property taxes would obtain a tax abatement for the quantity in extra of 10% of their earnings, as much as a restrict of $10,000; for these with incomes between $58,000 and $90,550, the profit could be step by step diminished as earnings rises.
“Whereas New York Metropolis’s property tax system has resisted reform for forty years, this complete bundle of proposals affords a sensible path ahead that addresses deep inequities and responds to the realities of huge variations in skill to pay. I urge the Metropolis’s State legislators to champion these reforms in Albany and present all taxpayers that authorities works of their pursuits,” mentioned Fee Member James Parrott.
“The work of this non permanent fee attracts a roadmap towards actual property tax fairness in New York’s property tax system, which has handled too many New Yorkers unfairly for many years. What frightens me probably the most, is that if authorities doesn’t take the steps in the direction of equity and transparency now, the inequity between householders goes to develop an increasing number of disparate every and yearly to come back,” mentioned Fee Member Allen Cappelli.
“Over the previous three years, the Fee has labored diligently to seek out options and/or suggestions to make our present property tax system extra environment friendly, comprehensible and clear. I imagine the suggestions in our last report make actual and substantial progress in the direction of realizing these targets. Accordingly, I wish to thank my Fee colleagues, in addition to the invaluable help workers from the New York Metropolis Council, the Mayor’s Workplace, the Division of Finance, and the Workplace of Administration and Funds for his or her laborious work and dedication to our mission,” mentioned Fee Member Kenneth J. Knuckles.
“New Yorkers deserve a fairer property tax system than what we have now, which is getting extra unfair with every year. The Fee presents a highway map for a fairer and easier system. Our elected officers have to comply with that highway quickly,” mentioned Fee Member Carol O’Cleireacain.
“The Fee was requested to develop suggestions to make the property tax system fairer, easier and extra clear. The suggestions on this report will just do that and, if enacted, profit residents who’ve been taxed unfairly for much too lengthy,” mentioned Fee Member Elizabeth Velez.
About the Fee
Mayor Invoice de Blasio and Speaker Corey Johnson introduced the Fee in Could of 2018. It was charged with growing suggestions to reform the current property tax system to make it easier, clearer, and fairer, whereas making certain that there isn’t a discount in income to fund important Metropolis companies.
Starting in 2018, the Fee performed a primary spherical of hearings the place members of public offered suggestions on the property tax system and the Fee obtained recommendation from consultants. Following a collection of Fee conferences in govt session, a Preliminary Report was launched in January 2020. The Fee’s work was delayed by the COVID-19 pandemic, however resumed within the spring on 2021. 5 further digital hearings have been held this 12 months to solicit suggestions on the preliminary suggestions. In whole, the Fee has sponsored 15 public occasions and has learn a whole lot of public feedback.
Fee members embrace Marc V. Shaw, Chair, Allen P. Cappelli, Carol O’Cleireacain, Kenneth J. Knuckles, James A. Parrott, and Elizabeth Velez. The Fee additionally included non-voting ex-officio members together with the Commissioner of Finance Sherif Soliman, Funds Director Jacques Jiha, Metropolis Council Finance Division Director Latonia McKinney, and the Deputy Director and Chief Economist of the Metropolis Council Finance Division Raymond Majewski.
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