An online petition launched last week that calls on New York City landlords to withhold property tax payment, in response to a statewide rent strike organized this month. As the Real Deal first reported, the Change.org appeal, “Property Tax relief or Tax strike,” has collected nearly 1,500 signatures as of Monday.
Image courtesy of Vornado Realty Trust and Robert A.M. Stern Architects
Last month, the city’s Advisory Commission on Property Tax Reform revealed a report outlining sweeping changes to the property tax code that would essentially raise the same amount of money but substantially redistribute where it comes from. Under the current system, property owners pay taxes based on assessed value rather than market value, so working-class homeowners often pay a higher tax rate than those who can afford the city’s multimillion-dollar luxury condos. Mansion Global took a closer look at the numbers and found that property taxes along Billionaires’ Row could increase up to five times their current rate under the proposed system.
Owners of multi-million dollar co-ops and condos in New York City would have to pay property tax at full market value under a recently released proposal to overhaul the current system. The city’s Advisory Commission on Property Tax Reform on Thursday unveiled its long-awaited report detailing reforms of the complex system that would tax properties of similar values at equitable rates. Currently, homebuyers pay property tax based on assessed value, rather than the market rate, which puts a bigger tax burden on low- and middle-income homeowners.
Photo via Creative Commons
New homebuyers in New York City could be charged property tax based on actual market prices, the New York Post reported on Wednesday. A group of city lawmakers is pressing Albany to change state laws to close a loophole that offers tax breaks to homebuyers in gentrifying neighborhoods. The “gentrification tax,” as the Post called it, would have homebuyers pay market rate taxes, rather than the assessed value, as a way to make the system fairer.
Calls for a pied-à-terre tax have increased since billionaire Ken Griffin closed on a penthouse at 220 Central Park South for over $239 million. The sale shattered the existing record of the most expensive home sold in the US by $100 million but Griffin will only be using the residence as “a place to stay when he’s in town.” City Council Members Mark Levine and Margaret Chin recently announced support for a bill that was first drafted by Sen. Brad Hoylman five years ago, which would place a yearly surcharge of 0.5% to 4% on secondary residences worth more than $5 million. In a statement released on Wednesday, State Budget Director Robert Mujica added his support, stating that a pied-à-terre tax could be combined with other revenue solutions to help fund the Metropolitan Transportation Authority’s $40 billion in capital needs.
220 Central Park South. Image via Vornado Realty Trust and Robert A.M. Stern Architects.
We’ve heard it before, but it’s always a shock to hear about how the city’s tax system undervalues big-ticket apartments in expensive neighborhoods. The Wall Street Journal reports that the effective tax rate on billionaire hedge funder Ken Griffin’s sky mansion at 220 Central Park South comes out to about 0.22 percent–compared with about one percent in the city’s less affluent neighborhoods. The reasoning behind this is tied to a complicated city property tax system that assesses all co-ops and condos as if they were rental properties. Rental income at nearby buildings is assessed in order to estimate a condo’s value.
Via Vornado Realty Trust and Robert A.M. Stern Architects
Update 2/26/19: Council Members Mark Levine and Margaret Chin announced on Monday that they plan on introducing a resolution in support of the pied-à-terre tax, as amNY reported. The tax would be modeled after the measure sponsored by State Sen. Brad Hoylman and apply an annual surcharge on non-primary homes worth more than $5 million.
Last month, billionaire Ken Griffin closed on a penthouse at 220 Central Park South for over $239 million, making it the most expensive home ever sold in the United States. Griffin, the founder of the hedge fund Citadel, said he will not use the pricey pad as a primary residence, but instead as “a place to stay when he’s in town.” The staggering sale has renewed support from public officials for a pied-à-terre tax, which would place a yearly surcharge on homes worth $5 million and up, and apply to non-primary residences, as reported by the New York Times.
Photo by Dan DeLuca/Flickr
In a city as pricy as New York, it’s no surprise the buildings here pay some of the heftiest property taxes in the country. And that’s overwhelmingly what Commercial Cafe has found in their Top 100 US Property Taxes in 2017 ranking, released this week to mark the end of tax season. New York, the report states, has an “overwhelming presence in the mix,” as 78 of the top 100 U.S. taxes belong to properties located across the state. In 2017, those buildings generated $2.2 billion in property tax revenue, accounting for 82 percent of the total contributed by all 100. (Buildings are mostly offices, alongside some mixed-use, retail, hotel, entertainment and residential properties.) While the top spot was claimed by an industrial property in Fort Salonga, New York — which pays a whopping $82 million of property taxes a year — the next 19 buildings are located here the city and include Stuyvesant Town, pictured above, and the Metlife Building.
Photo of Trump Tower courtesy of Krystal T’s Flickr
While this week marks just the third time President Donald Trump has visited New York City since his January inauguration, property taxes he filed after the election designate Trump Tower as his primary residence. As the Real Deal reported, Trump will save $45,000 by calling his penthouse his main home, utilizing a tax credit known as the “coop condo abatement.” The credit can be used by owner-occupied co-ops and condos and takes off 28.1 percent of property taxes for the unit. Because of the tax abatement, the president has saved a little under $200,000 on his taxes over the last five years.
“Section 581” by SITU Studio, Photograph by Patrick Mandeville
Billionaires get off nearly tax-free and billions go uncollected due to flaws in the way the city assesses property value. As part of a new exhibit at the Storefront for Art and Architecture in Soho, interdisciplinary architecture firm SITU Studio created visual representations of these inequities in one of their most glaring examples: the buildings along Central Park.
New York City’s property tax structure assigns higher real property taxes to renters than it does to the infamous absentee owners of the trophy condos on Billionaires’ Row, short-changing the city of millions in annual revenue, according to CityLab. The acrylic bands in the SITU models show the disparity between the taxed value of these properties and the sky-high amounts they’d actually sell for.