Taxation of New York City Real Property

Posted on 06-07-2017

by Steven Tishco, Marcus & Pollack, LLP

Introduction

This article provides an overview of real estate taxation in New York City (the “City”) including (i) the process by which the City assesses real property, (ii) how property owners challenge the City’s assessments, (iii) benefit programs available to reduce property owners’ real estate tax burdens, and (iv) the importance of understanding real estate taxes in lease negotiations. In New York City, real estate taxes have become an increasingly greater expense for property owners and landlords in recent years.  As such, they are an ever-growing factor that any potential purchaser or tenant must account for in its business decisions. Counsel on either side of any real estate transaction should possess at least a basic knowledge of the real estate taxation process to be able to appropriately account for such taxes in negotiations. The process is complex, involves interaction with many government agencies, and is often counter-intuitive. Therefore, a working knowledge of the process is also important in order to understand that, for more complex transactions, specialized real estate tax representation might be necessary and appropriate.

New York City’s Department of Finance (DOF) is the agency charged with assessing all real property in New York City. DOF reassesses all real estate (over one million parcels) each year.  Income generated from real estate taxes is the top source of revenue for the City, currently comprising over 40% of the City’s revenue.  As a result, real estate taxes are a major factor to account for in the sale / purchase, and leasing of real estate. Furthermore, the City offers numerous real estate tax benefit programs that builders, developers, purchasers, landlords, and tenants need to be aware of in considering any transaction.

Procedures for assessing real property, challenging real estate tax assessments, and qualifying for the various tax benefit programs are governed by the New York State Real Property Tax Law (RPTL) and the New York City Charter, Administrative Code, and Rules.

Arriving at a Tax Assessment

Unlike most jurisdictions around the country, New York City reassesses every property on an annual basis and adheres to a strict and consistent calendar for publication of its assessment roll.  Below is a summary of the key dates in the assessment process.

 

To read the full practice note in Lexis Practice Advisor, follow this link.

 


Steven Tishco is an associate at Marcus & Pollack, LLP. Mr. Tishco concentrates his practice on real estate tax assessment and exemption matters (tax certiorari). He handles all types of real estate tax disputes and appears regularly before the Courts of the State of New York and various New York City agencies. His experience includes litigation and trial work involving the valuation of residential and commercial properties.