My God! Corruption in New York City? And it benefits the rich in some way???
I’d love to live in NYC, but it’s too rich for my blood. Even still…
“The sum of the assessed values of the condos within a building could not exceed the assessed value of the whole building as a single parcel. So, if there are 50 units in a $50 million building, the cap on assessment for each unit is $1 million, no matter the views, location, or design—full stop.”
It’s unclear to me which part of this is the author of the original piece’s wording and what is the actual standard. I have to assume the second sentence is her interpretation of that first sentence. Nowhere does it actually say that for the condo valuation you divide the cost of the building by the number of units, even in the article that linked to NY.gov. I think this might be an erroneous simplification.
So, if there are 50 units in a $50 million building, the cap on assessment for each unit is $1 million, no matter the views, location, or design—full stop.
Unless property taxes in NY are progressive, it shouldn’t matter if 1 unit is worth $49 million and or 1 unit is worth $1 million, the total dollar figure is the same and therefore the percentage assessed for property taxes should be the same. The cheaper property holders though would be subsidizing the more expensive ones.
It sounds like the real problem there could be that ‘whole building’ assessments are ridiculously low.
But, yes, that sentence does not read like it’s author necessarily understand the situation. May just be condensed beyond meaning.
And if one unit is sold for 90 mil in a 50 mil building how does that work?
where single-family residences can cost north of $90 million, but whose owners pay about half as much tax as families with household incomes of $25K.
$25,000 x 10.3% - $2,575
$5,000,000 x 5.3% = $265,000
Math is our friend, Cory. Let’s correct to:
where single-family residences can cost north of $90 million, but whose owners pay slightly more than one hundred times as much CITY tax as families with household incomes of $25K.
I’ve been mulling this article over, and came to the conclusion that this, and the tax exemptions for new building, are the essential problems that the article wants tackled. But even in well governed cities without billionaires, valuing property and figuring out a way to tax it while avoiding wide swings due to rising and declining neighborhoods is problematic. But the article is so steeped in soak-the-rich rhetoric that it’s hard to sift down to that in one reading. For example the Figure 9 chart is so irrelevant to the central problem of the article that it’s laughable. Should anyone be surprised that what someone pays in property tax is based on property and not income? Income is completely irrelevant to property tax.
I also challenge the assumption that the extra money is something the city is entitled to and needs. At those luxury levels, where the usual price inputs (construction costs and income of the likely buyers, etc.) are essentially irrelevant and it becomes essentially “whatever someone is willing to pay” for the prestige or location or the view, I think it’s hard to say that if a condo sold for 50 million instead of 25 million, is the 50 million occupant really using (25 million x mil rate) more in city services than if it sold for 25 million? Assuming the same number of occupants and the same square footage, that extra money is just gravy.
By all means, end the crony crapitalism of selected tax breaks and reform how buildings are assessed. That is unfair to all. But I think the “billionaires should pay more” attitude makes more sense in an income tax discussion.
English is our friend too. He clearly means “half as much of their incomes,” and it’s disingenuous to pretend misinderstanding of that.
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