“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.
Find out how the state law is giving billionaires a free lunch
Back in March, we learned that the owner of the $100 million apartment at One57 (the most expensive sale ever in the city) pays only $17,268 in annual property taxes– “or 0.017 percent of its sale price, as if it were worth only $6.5 million,” as we noted. “In contrast, the owner of a $1.02 million condo nearby at 224 East 52nd Street is paying $24,279, or 2.38 percent of its sale price.” Why does this happen? It’s in part due to the 421-a program, which offers tax breaks for the inclusion of affordable housing and “lowers the billable-assessed value of a property to incentivize real-estate development,” according to CityLab. It’s also thanks to the city’s haphazard system for assessing market values of condos and co-ops.
In response to this growing issue of inequality, Mayor de Blasio announced just last week that he hopes to end 421-a for condos, as well as implement an even stricter mansion tax. To make the issue a bit more black-and-white, CityLab has put together two charts that show just how disproportionate the actual value of the city’s ten most-expensive apartments is compared with their property taxes. As they note, “In NYC, billionaires pay 1/100th the average property-tax rate.”
Find out more here
Remember the $100 million apartment at One57, the most expensive ever in New York City? Well, the (presumably) billionaire buyer pays just $17,268 in annual property taxes on the unit, or 0.017 percent of its sale price, as if it were worth only $6.5 million, according to the New York Post. In contrast, the owner of a $1.02 million condo nearby at 224 East 52nd Street is paying $24,279, or 2.38 percent of its sale price.
This is just one example of the fact that the owners of the city’s ten most expensive apartments pay effective rates that are unbelievably lower than those paid on cheaper properties. How is this possible? It’s in part due to the 421-a tax abatement, but more so due to the city’s convoluted method of assessing market value for condos and co-ops.
More on the tax inequality here
The Upper East Side, where the most $5 million + homes are located, via CityRealty
If you think that statistic is jaw-dropping, consider this, too–those 7,279 homes valued at more than $5 million amount to a total fair market value of $65.2 billion, according to data from the city’s Independent Budget Office. The Wall Street Journal requested the data to take a closer look at the proposal to impose higher property taxes on pied-à-terre owners, and the findings show that “the city’s most expensive homes would generate less money from a higher tax surcharge than what its advocates have suggested.”
More details here