New York City Property Tax Reform

Research & Policy | September 24th 2018

City Street with text Policy Minute

This week, the New York City Advisory Commission on Property Tax Reform will begin holding a series of public hearings on the current property tax system in New York City. Convened by Mayor Bill de Blasio and Speaker Corey Johnson in May, the commission is charged with developing proposals to make the system simpler, clearer, and fairer, while also ensuring no reduction in city revenues. Numerous public officials, advocates, and academics have called for property tax reform in order to address inequities within the current four-class property tax system. Currently, litigation is pending against the city in which a coalition of real estate developers and civil rights advocates assert that the property tax system is inequitable and discriminates on the basis of race.

The commission is co-chaired by Vicki Been, Faculty Director at the NYU Furman Center, and Marc Shaw, Interim Chief Operating Officer for CUNY.  Been is serving on the commission in her personal capacity, and not on behalf of the NYU Furman Center. 

In light of these developments, we have updated and are re-releasing this Policy Minute on New York City’s property taxes (originally published in February 2016). Vicki Been was not involved in the development of this Policy Minute.

Status Quo

  • Property taxes are New York City’s largest source of revenue. In FY 2018, the city collected over $25 billion from property owners, representing 30% of all city revenues.
  • While properties in Class 1 (1-3 residential units) have an estimated market value (calculated by the city’s Department of Finance) that is double that of properties in Class 2 (4+ residential units), they pay a smaller share of the overall tax levy. Read policy brief >> 

NYU Furman Center Research

  • The undervaluation of co-ops and condos has significant consequences for the distribution of tax burdens in New York City. A policy brief by NYU Furman Center, Shifting the Burden: Examining the Undertaxation of Some of the Most Valuable Properties in New York City, outlines how some of New York City’s most valuable properties in its highest-cost neighborhoods are significantly and persistently undervalued and discusses the consequences. The report identifies 50 individual co-ops in 46 buildings that were sold in 2012 for more than DOF’s estimate of the market value of the entire building. Read policy brief>>
  • New York City’s property tax system favors homeowners.  A report by the NYU Furman Center, Distribution of the Burden of New York City’s Property Tax, which appeared in the State of New York City’s Housing and Neighborhoods in 2011 report, finds that all property is not created equally when it comes to New York City’s property tax. The city’s tax system “provides for radically different tax treatment of equally valuable properties, depending on the use of the property and the form in which it is owned.” Read report>>

Other Research

InfoGraphic comparing CoOp single-unit market value ($50M) to assessed  building value ($15.7M)

Property Taxes Beyond NYC

  • MAP: Property taxes: How does your county compare? (CNN Money) View map>> 
  • READ: Comparing property tax systems in New York City and London (The Economist) Read full article >> 
  • READ: 50-State Property Tax Comparison Study for Taxes Paid in 2017 (Lincoln Institute of Land Policy and Minnesota Center for Fiscal Excellence) Read full study >>  

More Viewpoints From NYC

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