More city homeowners are appealing their property tax bills than in years past as the levy — which has doubled in the 10 years since Mayor Michael Bloomberg took office — continues to increase, according to officials.
Next year, the average property tax bill increases will range from $30 per year in the Bronx to as much as $1,600 in Manhattan. Brooklyn’s average hike is $133, Queens $113 and Staten Island $94, according to the city's Department of Finance.
But there is a mechanism for property owners to challenge the value the city has attached to their real estate. First they have to master how the New York City property tax system actually works. And that’s not easy.
"Property taxes are very complicated, and really you can not explain them fairly and accurately in sound bites," said David Frankel, commissioner of the city’s Department of Finance.
His agency sends out the property tax bills. Frankel said the formula protects city homeowners from spikes in property values with a cap on how much their homes assessment can go up in any one year.
"The assessed value of a one-, two-, or three-family home … can only go up 6 percent a year or 20 percent over five years,” he said.
But Frankel says the incremental upward adjustment in real estate taxes translates into tax increases even if the current real estate market is soft.
“That means if in the middle of that process your values started to go down … the maximum assessed value would still not have been reached for that property and your taxes could go up,” Frankel said. “No one realizes that when their taxes continue to go up as their property goes down."
Councilman James Oddo, a Republican from Staten Island, said the city's property tax formula is so complicated that he finds it nearly impossible to explain to his constituents.
"Their eyes glaze over with in 30 seconds, and they think you are another politician throwing jargon at them,” Oddo said. “The one thing that is clear is their bills go up.”
“By fiscal year 2016, we are going to have $20.2 billion in revenue," from property taxes, he added, “Don't we owe it to the public to explain to them just exactly how we are picking their pockets?”
Glen Newman, president of the city Tax Commission, said 50,000 New Yorkers made their case for why their homes’ assessments were too high last year. It was a 20 percent increase compared to 2006.
"We have seen a growing trend of people filing especially with the down turn in the market," Newman said.
About one in five applications for a lower assessment got an offer from the city last year, which translated into potential tax relief for 10,000 tax payers who were offered an average of between an 8 to 10 percent reduction on their assessments.
Newman says the most disgruntled group of property tax payers are people who own condos and co-ops. Newman says those they often don't realize those assessments have nothing to do with the going sales price for surrounding co-ops or condos in their neighborhood.
“The law requires that co-ops and condos should be valued as if they were rentals so what you have is a hypothetical income and expense based on the fiction … and I guess you can' be too surprised if a hypothetical based on a fiction does not reflect reality,” he said.
The deadline for appealing property tax assessments this year is March 19 at 5 p.m.