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Author here. I've updated the post to reflect that the assessed value for apartment buildings (more than 3 units) is exactly 45% of market value. It is not "w

Author here. I've updated the post to reflect that the assessed value for apartment buildings (more than 3 units) is exactly 45% of market value. It is not "well under" 50% for any standard apartment building... it is exactly 45% by law. More info: http://www1.nyc.gov/site/finance/taxes/property-determining-your-assessed-value.page http://www1.nyc.gov/site/finance/taxes/property-determining-...

vostok 10y ago
> Author here. I've updated the post to reflect that the assessed value for apartment buildings (more than 3 units) is exactly 45% of market value. It is not "well under" 50% for any standard apartment building... it is exactly 45% by law. This is still not completely accurate. Read the section about transitional assessed values and maximum assessed value increases.
- adamscj 10y ago
  It looks like most private residencies have an assessed value of 6%, not 45% Tax Class: Property in NYC is divided into 4 classes: Class 1: Most residential property of up to three units (family homes and small stores or offices with one or two apartments attached), and most condominiums that are not more than three stories. Class 2: All other property that is not in Class 1 and is primarily residential (rentals, cooperatives and condominiums). Class 2 includes: Sub-Class 2a (4 - 6 unit rental building); Sub-Class 2b (7 - 10 unit rental building); Sub-Class 2c (2 - 10 unit cooperative or condominium); and Class 2 (11 units or more). Class 3: Most utility property. Class 4: All commercial and industrial properties, such as office, retail, factory buildings and all other properties not included in tax classes 1, 2 or 3. https://www1.nyc.gov/site/finance/taxes/definitions-of-property-assessment-terms.page https://www1.nyc.gov/site/finance/taxes/definitions-of-prope...
  - bradleyjg 10y ago
    What makes you think that most private residences in NYC are in buildings with up to three units?
evanelias 10y ago
At least in my experience, the assessed values for 4+ unit buildings tend to be substantially lower than 45% of true market value. Property tax rates in NYC are actually not too terrible. I've owned homes in NYC as well as northern NJ, and also recently spent a lot of time looking at condos in the NYC area. Tax rates in northern NJ are pretty much always higher than NYC -- NJ is known as one of the states with highest property tax rates. Yet, typical property tax bill for a condo in northern NJ amounts to around 0.8-1.2%/year of the true market value of a property. In NYC it'll usually be under 1% of true market value for a 4+ unit building, even with no abatement. And for a 1-3 unit building it's a tiny fraction of this. Also consider that property tax payments are tax-deductible federally... and that property value here is rising rapidly, so the value of your investment is increasing by a dollar amount that may exceed the cost of taxes + maintenance/common charges + mortgage. Sites like StreetEasy are very helpful for seeing the tax rates for homes on the market -- I've personally never seen any with rates nearly as high as suggested in your article. You can also look at quarterly reports from major brokerages to get a good sense of cost per square foot of condos and coops in various neighborhoods, and see how quickly they are rising in recent years.

vostok 10y ago

> Author here. I've updated the post to reflect that the assessed value for apartment buildings (more than 3 units) is exactly 45% of market value. It is not "well under" 50% for any standard apartment building... it is exactly 45% by law. This is still not completely accurate. Read the section about transitional assessed values and maximum assessed value increases.

adamscj 10y ago
It looks like most private residencies have an assessed value of 6%, not 45% Tax Class: Property in NYC is divided into 4 classes: Class 1: Most residential property of up to three units (family homes and small stores or offices with one or two apartments attached), and most condominiums that are not more than three stories. Class 2: All other property that is not in Class 1 and is primarily residential (rentals, cooperatives and condominiums). Class 2 includes: Sub-Class 2a (4 - 6 unit rental building); Sub-Class 2b (7 - 10 unit rental building); Sub-Class 2c (2 - 10 unit cooperative or condominium); and Class 2 (11 units or more). Class 3: Most utility property. Class 4: All commercial and industrial properties, such as office, retail, factory buildings and all other properties not included in tax classes 1, 2 or 3. https://www1.nyc.gov/site/finance/taxes/definitions-of-property-assessment-terms.page https://www1.nyc.gov/site/finance/taxes/definitions-of-prope...
- bradleyjg 10y ago
  What makes you think that most private residences in NYC are in buildings with up to three units?

evanelias 10y ago

At least in my experience, the assessed values for 4+ unit buildings tend to be substantially lower than 45% of true market value. Property tax rates in NYC are actually not too terrible. I've owned homes in NYC as well as northern NJ, and also recently spent a lot of time looking at condos in the NYC area. Tax rates in northern NJ are pretty much always higher than NYC -- NJ is known as one of the states with highest property tax rates. Yet, typical property tax bill for a condo in northern NJ amounts to around 0.8-1.2%/year of the true market value of a property. In NYC it'll usually be under 1% of true market value for a 4+ unit building, even with no abatement. And for a 1-3 unit building it's a tiny fraction of this. Also consider that property tax payments are tax-deductible federally... and that property value here is rising rapidly, so the value of your investment is increasing by a dollar amount that may exceed the cost of taxes + maintenance/common charges + mortgage. Sites like StreetEasy are very helpful for seeing the tax rates for homes on the market -- I've personally never seen any with rates nearly as high as suggested in your article. You can also look at quarterly reports from major brokerages to get a good sense of cost per square foot of condos and coops in various neighborhoods, and see how quickly they are rising in recent years.