Tax the Rich
It’s a story that pops up every few years: New York City’s co-operative apartments—especially those on the Upper East and West Sides and in the wealthiest neighborhoods in brownstone Brooklyn—pay next to nothing in property taxes, leaving massive tax burdens for poorer renters.
Back in 2009, for example, the Manhattan Institute found that 740 Park Avenue, that limestone-faced bastion of privilege home to billionaires like David Koch, was taxed as if it were a postwar rent-stabilized building in Yorkville.
According to a report released today (.pdf) by the Furman Center for Real Estate and Urban Policy at New York University, nothing’s changed.
In a city where many residents’ wealth is wrapped up in their real estate, the ability to pass on a co-op, condo or townhouse to a surviving spouse without paying taxes is a significant benefit. But until this morning, even in New York—one of the handful of states in the country where same-sex marriage is legal—same-sex spouses were not exempted from federal inheritance taxes. Taxes that, when applied to a couple’s lifetime savings and particularly their home, could significantly reduce the value of an estate for the surviving spouse.
Now, in the wake of the Supreme Court decision to strike down the Defense of Marriage Act, surviving same-sex spouses will be able to inherit real estate and other property tax-free—one of the federal benefits that have long been extended to other married couples.
The tax man
During the past decade, it has become increasingly popular for home buyers—particularly those with bold-faced names—to shield their identities with LLCs and trusts. By using an LLC, a privacy-minded person can (usually) prevent sleuths from salmon-colored papers like this one from dredging up their purchase from city records and exposing how much they paid and what their new kitchen looks like.
But while such identity cloaking has become all but de rigueur for the celebrity buyer and a matter of preference for other press-averse people, the cost of privacy is poised to go up considerably. That’s because the city’s co-op and condo tax abatement, which has been enjoyed by nearly all co-op and condo owners at a sizable 17.5 percent since 1996, will no longer be available to those who own their apartments through LLCs or trusts. The change will mean considerably higher taxes for some 7,700 property owners.
Last week, Massey Knakal hosted its annual Multi-Family Summit at the McGraw-Hill Conference Center in midtown. The crowd of over 700 attendees had an opportunity to hear perspectives from dozens of speakers, including many of the top participants in this market segment in New York City.
Azi Paybarah has the latest at our sister site, PolitickerNY, on Assembly Speaker Sheldon Silver’s property tax cap proposal. Scroll down and you’ll see praise from the big-time business group, Partnership for New York City.
firstname.lastname@example.org :: @tacitelli Read More
If the computer’s don’t kill us, the taxes will.
The city’s Department of Finance began using a new formula along with new computational software last year to calculate taxes for the city’s vast swathes of co-operative housing stock last year. It resulted in huge new assessments for hundreds of buildings, according to The Read More
Property taxes were one of the biggest issues in last year’s gubernatorial campaign, but it was seen largely as a suburban issue affecting upstate and Long Island homeowners, not the vast ranks of city residents who tend to rent. But it turns out property taxes have consequences right here in the five boroughs, as The Read More
A reader from the Upper West Side emails:
Yesterday I received 2 calls from Siena Research. The first looking for a man and since I wasn’t a man, they didn’t poll me. Second time they looked for a man of various ages then accepted me.
Lots of questions about how bad real estate was in Read More
About a month ago, the city’s Department of Finance published the tentative assessment roll for fiscal year 2012 (July 2011-June 2012). Projected market values in the upcoming year increased by 3.75 percent to about $823.5 billion for New York City’s more than one million properties. This statistic confirms what property owners have known Read More