Real Estate Taxes

Well, here we go again, it’s that time of the year again, (no not super bowl Sunday) it’s “Real Property Tax Protest” Time.

By now you should have received the 2009-2010 Notice of Assessment for your properties, from the Department of Finance (DOF) (or you can get them online at NYC.gov). This is the notification by the city of what your property is going to be assessed at in the 2009-2010 tax year which begins on July 1, 2009.

We all know that we pay a lot of money in real estate taxes, and next year we are going to pay more than ever. The tax rate just sky rocketed to over 16% and money is tight, so it is time that you think about; learn about; and maybe even do something about; your real estate taxes; how your actual tax is calculated. (Don’t call me; this is not an advertisement, nor am I looking for tax protests business).

Staten Island, like the rest of the city, state & probably country is divided up into Blocks, which are further divided up into Lots.

(Block #1, Lot #1, is #153 Bay Street, St. George, (Staten Island’s most northerly address?). #70 Saterlee Street, in Tottenville, which is owned by the NYC Parks and Recreation, is Block 7966 Lot 75 (southernmost point?). I guarantee that your Staten Island properties are numbered between these two Block Numbers).

The blocks are divided and assigned to individual tax assessors. Every time there is a sale of property, and a new deed is recorded, a form is filled out and filed, called the NYC RPT, which contains all of the information regarding the transfer, (price, date of sale, etc). This information is given to the assessor who will evaluate it to reflect the price which was just paid. The assessor may also determine that some of the same houses in the area need to be updated based upon this one sale, or if there are several sales and the assessor notices that the property values have risen in the area. Theoretically, it is the tax assessors’ job to review every property for the following tax year. In reality, computer models are used for the most part.

The assessments are sent out the middle of January every year.

The tax rate used to be set in June, and on occasion, the rate wasn’t set until after July 1st, in which case you couldn’t pay your taxes early which created all kinds of havoc to title companies and banks). (In order to save a $400 rebate program, our tax rate almost doubled to over 16%). The assessor determines the value of the property; the Mayor and the City Council determine the tax rate

But anyway, if you don’t agree with the assessment, you have the right to object, or “protest”. This is done by filing certain forms that are available online, or at the tax department office at 350 St. Marks Place, first floor (although the assessors’ office is on the 4th floor the forms are on the first). There are different forms depending upon the different “Classes” of property.

Class 1: 1-3 family houses and units in condominiums less than 3 stories.
Class 2: All other residential properties.
Class 3: Utility-company owned property.
Class 4: All other property (commercial, apartment houses, offices buildings’, stores, vacant land, etc.).

RPI&E- In order to protest any property assessed higher than $40,000, (other than Class 1, and except vacant land, or if you just bought or built the property) you will have had to file the RPI&E (Real Property Income and Expenses form) by September 2nd, 2008. This form must be filed. If you don't file the RPI&E, you can’t protest this year. There is no such requirement for Class 1 properties.

For Class 1 properties, you must file on or before March 16th, for Class 2, 3, or 4 properties you must file on or before March 2nd. THERE ARE FEW ABSOLUTES IN LIFE, BUT THIS IS ONE OF THEM. IF YOU MISS THE DEADLINE YOU ARE OUT OF LUCK FOR THE CURRENT YEAR. NO EXCEPTIONS, PERIOD, END OF STORY! Once the protests are timely filed, the tax commission may offer you a reduction, or just schedule a hearing. At the hearing you must submit proof (sales) to the hearing officer, who is an auditor trained in real estate assessment. Used to be that the tax commissioner heard all of the protests, were political guys, and you could schmooze with them, and get reductions. Those days are gone. You can mention things that they don’t know about, like the brook running through the property, or the uranium buried in the rear yard, but you have to have proof. The worst argument you can make is that everyone else on the block has a lower assessment. They don't care. They want to know why YOUR property is valued too high.

Keep in mind that the only thing you can protest is the assessed value, not the market value listed. The assessed value does not usually fall in line directly with the market value. In fact, it may reflect a lower market value.

The criterion is to establish the value of the property as of January 5th, 2009. Second of all, to show that properties are lower, these days, you would have to show sales, or perhaps if you know about them, contracts of sale, may be acceptable with the proper documentation. You can establish that there were properties in contract of sale on January 5th, for less money, that may have closed by the time of the hearing.

After the hearing, you may be offered a reduction. If you accept it, then you have to agree to withdraw your protest. If you do not agree, then your protest may continue. Generally what is done however, is you protest again the following year. If you have filed an appeal on Class 2, 3, or 4 properties, if you agree to the settlement the second year, the hearing officer will probably require that you withdraw the year before protest/appeal.

Since he stopped being the tax commissioner, I’ve been using Jay Goldberg, Esq. (212) 344-1048) to handle my commercial protests, because his practice is primarily limited to tax protests, writs of certiorari, and litigating real estate taxes, and he knows what he’s doing. (his office is in Manhattan, but he lives on Staten Island, so he will meet you here. (By the way, he gets paid by taking a percentage of the savings). There probably are others, but I don’t know who they are.

Egon Salmon was tax commissioner for awhile in the late 1980's and early 1990's. His son Jon Salmon handled protests for a number of years after his father resigned as commissioner, but became tired of the mountains of paperwork required. He says at heart he's a salesman, not a paper pusher. He no longer does them, nor does he want to do them again (I already asked him).

Tony Gaeta, the late Borough President started in the tax assessor’s office, before he became the assistant to Congressman Murphy. Ray Vomero, who died this past week, was the head tax assessor before becoming a real estate appraiser. May they both rest in peace.
Unfortunately I wasn’t able to interject much humor into this email because there isn’t anything funny about it. But I would like to leave you all with something that I saw on the wall of my granddaughter’s guidance counselor’s office, which has absolutely nothing to do with tax protests:

Worrying does not empty tomorrow of its troubles
It empties today of its strength