According to the Wall Street Journal, condo and co-op owners blasted the city’s Department of Finance at a hearing yesterday over new property valuation methods that led to some property assessments increasing by as much as 140% in value. That increase could lead to co-op and condo owners paying as much as 40% more in property taxes.
Last year, the Department of Finance began using different valuation methods when analyzing and assessing the value of properties. Under the new system, it was discovered that many co-op and condominium apartments were being undervalued by the city for many years.
The new changes in valuation are set to take effect for 906 buildings citywide. Some buildings are facing an assessment increase of 86% over the previous value.
Homeowners expressed anger not only over the steep rate increases, but also that the changes were implemented without warning. City Councilman Domenic Recchia Jr. said that the Department of Finance “ambushed” homeowners with rate changes that “literally took place overnight.”
With condo and co-op owners set to take a huge hit in property taxes, the question has been raised as to how to offset tax increases to help homeowners. The Department of Finance is currently implementing a cap on property assessments set at 50%, while a bill in the State Senate is proposing that property taxes on co-ops and condos be capped at a 6% rate. The bill would also re-classify co-ops and condos in the same tax bracket as single-family homes. Currently, they are assessed as rental property.
Finance Commissioner David Frankel said that he would recommend changes to the tax code to relieve homeowners, but that he did not support any property bills currently in consideration by the state legislature.
UPDATE: Commissioner David Frankel, bowing to heavy political pressure, has agreed to limit co-op increases to no more than 10% above last year’s bill.
Comments(0)