The New York City Council agreed on the new $107 billion budget yesterday and is voting on it today. The fiscal year 2024 (7/1/2023 – 6/30/2024) property tax rates will be as follows:
The tax class 4 (commercial) tax rate had its biggest percent decrease in 16 years and is the lowest rate in 22 years. The tax class 2 (apartment buildings) tax rate had its biggest percent increase in 15 years and is the highest rate in 10 years.
Tax year 2023/24 assessments saw moderate increases this year. Class 4 market values increased +6.89% from 2022/23 but are still below pre-COVID 2020/21 because market values declined -17.42% from 2020/21 to 2021/22. Class 2 market values increased +1.06% this year and are up +1.15% above pre-COVID 2020/21. The City’s taxable assessments increased +4.43% overall this year. When you combine changes in the taxable assessments and changes in the tax rates, citywide tax class 2 taxes will increase +8.19%, and tax class 4 taxes will decrease -1.56% over last year.
Specific Manhattan market values changed as follows: tax class 2 rentals -3.54%, tax class 2 co-ops 0.00%, tax class 2 condos +6.95%, tax class 4 offices +5.42%, and tax class 4 retail +7.8%. Brooklyn, Bronx, and Queens all had market value increases in tax class 2 rentals.
On June 3, 2023, the Department of Finance sent the tax bills for payment due July 1, 2023. You can view those bills online. DOF used the prior (Fiscal 2023) tax rate to compute the bills. DOF will use the new (Fiscal 2024) tax rates for the November 2023 bills, with adjustments for the difference, for payments due on or after 1/1/2024. Some customers received newly redesigned statements of account in color.
On June 8, 2023, the City Council established 0.5% as the 2023/24 discount percentage for early payment of real estate taxes. That is the same rate since 2015. The Discount Rate is a tool to encourage prepayments.
On June 22, 2023, the City Council established the annual interest rates for the non-payment of property taxes for 2023/24. All rates are 100 basis points higher than last year. The Fiscal 2024 interest rates are as follows:
- For AVs > $450,000, the interest rate is 15%.
- For $250,000 < AV ≤ $450,000, the interest rate is 8%.
- For AVs ≤ $250,000, the interest rate is 5%.
New this year is a 2% interest rate for certain properties subject to installment payment plans for late payment of property taxes, assessments, or other charges, where the owner must meet the eligibility requirements, including when the property owner uses the property as their primary residence and the combined income of all owners is no greater than $200,000. (The AV is the Actual Assessed Value; except for cooperative apartments where it is the AV per residential unit.)
The RPIE-2022 and Storefront Registry were due June 1, 2023. If you failed to file, you can still file the RPIE now and avoid the monetary penalties. Class 2 and 4 property owners who have filed storefront information must file a Supplemental Storefront Registration form to report any property ownership changes or storefront vacancies that occurred between January 1 and June 30, 2023, or the date you sold the property, whichever is earlier. The deadlines to file your Supplemental Storefront Registry are: August 15, 2023 to report storefronts vacant as of June 30, 2023; and February 15, 2024 to report storefronts vacant as of December 31, 2023 (this second filing is a new requirement).
The residential co-op/condo tax abatement technically expired today with the end of tax year 2022/23. Nevertheless, DOF sent the 2023/24 bills with the abatement included. The state legislature extended the abatement through tax year 2026/27, but the governor hasn’t signed it into law yet. Property tax reform was absent from the New York State budget. It has now been a quiet one and a half years since the NYC Advisory Commission on Property Tax Reform released its final report recommending the most significant changes to NYC’s property tax system in 40 years.
The Childcare Center benefit is a property tax abatement for property owners whose property construction, conversion, alteration, or improvement completed after April 1, 2022, resulted in the creation of a new childcare center or an increase in the maximum number of children allowed in an existing center as specified in the DOHMH permit. The deadlines to apply are March 15, 2024, and March 15, 2025. The Industrial & Commercial Abatement Program (ICAP) provides property tax abatements for eligible industrial and commercial buildings that are built, modernized, expanded, or otherwise physically improved. The deadline to apply is March 1, 2025.
If you have any questions or would like to discuss how you can reduce your New York City property taxes, please contact your trusted R&E attorney or Benjamin M. Williams, Head of the firm’s Property Tax Department, who authored the above.