NYC Real Estate Tax Guide

Property taxes in New York are a significant monthly expense to consider when owning an apartment or brownstone.

With a resurgence in the real estate market from 2008 lows, valuations for properties have skyrocketed in recent years. With this increase in property prices, the NYC Department of Finance has made sure increase the assessments placed on properties, thereby significantly increasing NYC real estate taxes. According to this New York Post article, between 2014 and 2015 property assessments increased by 9% to $988.3 billion. Compare that to the 6.6% increase between 2013 and 2014. 

NYC real estate taxes are based on a multitude of factors, inclusive of the following:

• Location
• Building Type
• Unit Type
• Indoor Square Footage
• Outdoor Square Footage
• Filed Permits for Renovations / Upgrades

NYC Real Estate Taxes are important to consider because they impact property resale values.

It should come to no surprise that buyers seek out properties that have the lowest possible taxes, and the reason this is so is because it helps reduce the monthly carrying costs of that respective property. As neighborhoods continue to appreciate in value, their tax assessments will also continue increasing, thereby increasing the property taxes that will need to be paid.

Taxes can be paid monthly, quarterly or annually.

Taxes can be billed by your lender through your monthly mortgage statement, whereby the funds intended for the NYC tax bill will be transferred to an escrow account until they become due by the NYC Department of Finance.

They can also be paid by the property owner, whereby they are sent 4 quarterly statements per year, or for a slight reduction, the owner can make a onetime annual payment. So ask yourself, do you want to receive a tax bill every 3 months, once a year or never at all? If you have your lender setup an escrow account, they will collect the taxes when you pay your mortgage, and you will never receive a property tax bill from the City of New York.

421-a Tax Abatements allow buyers to find properties with low NYC real estate taxes...for a limited period of time.

Tax abatements were created by the city to incentivize developers to rezone, build and convert underutilized and abandoned plots of land. Developers and apartment buyers have benefited from tax abatements across NYC. Ultimately, instead of having a plot of land that would generate little to no tax dollars, the 421-a tax abatement program has helped the city create long-term opportunities to generate taxes. For more information on how the 421-a tax abatement impacted NYC real estate taxes, make sure to read the following article.

Properties that benefited from these tax abatements discounted the property taxes for periods ranging from 10 to 25 years. While there are still many properties available that benefit from these abatements, the 421-a tax abatement program expired in the beginning of 2016, meaning that buildings that started construction after this time period will no longer benefit from the abatements. Below you can find an example of the types of properties in Manhattan that were granted abatements.

When properties received tax abatement status, their resale values far exceeded their peer buildings without abatements because the significant reduction in monthly costs over a 10 to 25 year period.

How can you look up NYC Real Estate Taxes for a specific property?

New York property taxes are public record. As such, they can easily be found online.

To start, you must identify the lot and block of a specific property. The lot and block system has been utilized by for the city government to create a tax map.

To begin your search for a property's NYC real estate taxes, go to the Borough-Block-Lot (BBL) Lookup.

Make sure to press on the "Get the borough, block and lot number" hyperlink, and you will end up at a page that will ask you for the borough, street address and unit number (if applicable).

Type in the address for which you are seeking the NYC property taxes. Perhaps it is an apartment or brownstone you are interested in purchasing, or maybe you want to seek out the history of real estate taxes for your current property.

Once you type in the address and hit the "search" button, you will end up at a page that looks as follows:

At this point, you will be able to access the following:

• Block and Lot Numbers
• Account History
• Quarterly Property Tax Bill
• Market Value History
• Final Assessment Roll
• Notice of Property Value

These are all important factors for your understanding of your NYC real estate taxes.

For you to be able to see what the quarterly taxes look like, click on the most recent "Quarterly Property Tax Bill."

You will see something that looks as follows:

This is a quarterly bill, meaning that the owner of this property will receive a bills like this every 4 months. For the example above, to understand the monthly NYC real estate tax bill, you have to take the Total current charges and divide them by 3 to get the monthly NYC real estate taxes. For the example above, it would be dividing the $25,097.21 by 3 to get the monthly figure.

Co-ops have NYC real estate taxes included in the maintenance, while condos have them billed separately.

This is an incredibly important distinction to remember as you are looking at properties. For more differences about condos and co-ops, make sure you take a look at this informative guide.

If you have any questions about NYC real estate taxes, give the NYC Department of Finance a call by dialing 311. Surely someone will be happy to help when you dial in.

Interested in learning more about the current state of property taxes in NYC? 

Read this latest blog post to understand how tax rates don't need to go up to adversely impact the property taxes owed by owners.

At Blooming Sky, we specialize in helping our clients navigate through the property purchasing process in New York City. To learn more about what we do, check out our home page here and make sure to sign up to our newsletter to stay up to date on real estate news across NYC.