NYC Property Tax

Final NYC Property Tax Error Correction Rules Adopted

Final NYC Property Tax Error Correction Rules Adopted

Published 1/6/2025 at 12:21 PM

By: Benjamin Williams

Back in November, I posted an overview of the proposed changes to the Department of Finance’s (DOF) rules governing how certain property tax errors can be administratively corrected. Following a public hearing on November 22, 2024—and many spirited comments from taxpayers, practitioners, and stakeholders—the DOF has now adopted a final version of these amendments. These new rules took effect on January 5, 2025. Here’s what you need to know.

My Testimony, Written Comments, and CER Experience

During the November 22, 2024, public hearing, I personally provided oral testimony challenging the proposed changes. I highlighted real-life examples where even the then-current rules sometimes failed to address legitimate errors, and I urged DOF not to limit valid corrections simply because of potential abuses. I also submitted written comments emphasizing that taxpayers need a fair path to address inaccuracies—whether they are long-term owners or new purchasers inheriting old mistakes.

Under the old CER program, I’ve helped property owners save millions of dollars in property taxes by correcting errors such as overstated building areas, inaccurate unit counts, and other factual mistakes. Unfortunately, with these newly tightened rules, that level of relief will be more limited going forward, as the scope of correctable errors and the time frame for corrections are both substantially narrowed.

Recap: The Proposed Changes vs. the Final Rules

1. Who Can File for a Correction?

  • Proposed: Only the property owner (or “other qualified filer”) who owned the property in the tax year of the error could file.
  • Final:
    • The final rules do allow current owners to apply for corrections in tax years when they did not own the property.
    • However, a refund or credit will only be issued if the new owner can show they actually paid those back taxes (e.g., reimbursing the prior owner in the acquisition year).
    • If you cannot prove you bore the tax burden for those older years, DOF may still remove the erroneous assessment on a go-forward basis, but no refund will issue for those past years.

Key Takeaway: The final rule is more flexible than the original proposal; new owners can correct inherited errors—but must document that they paid the taxes to get a refund.

2. Shortened Time Frame for Corrections

  • Old Rule (Pre-2025): Taxpayers could correct errors going back six years.
  • Proposed Rule: DOF would only correct errors for the current tax year plus the two directly preceding tax years (three total), with very narrow exceptions.
  • Final Rule:
    • Maintains the “three-year window.”
    • Extenuating circumstances (documented medical issues, declared disasters, etc.) can allow a lookback beyond three years if doing so would not unduly prejudice DOF.
    • Clarifies that you can fix errors for the current year and the two prior years—removing the ambiguity about “either/or.”

Key Takeaway: Property owners now have a much shorter window to correct errors. If you qualify for an exception, you must show not only a compelling reason (health/disaster) but also that DOF is not unfairly prejudiced by extending your lookback.

3. Corrections After Settlements and Prior Actions

  • Proposed: If you took your case to the Tax Commission or court and received a decision on the merits, you couldn’t file a Clerical Error Review (CER) for that same issue or year.
  • Final:
    • Restricts the prohibition to tax years included in a settlement agreement with the City.
    • If your settlement covers Tax Years X, Y, and Z, you cannot file a CER for those years, whether that settlement was Tax Commission-related or resolved in court.

Key Takeaway: Once you settle a specific tax year, the final rules bar any subsequent CER for that year.

4. Narrow Definition of “Clerical Errors” and “Errors in Description”

  • Proposed: Only purely “ministerial” or factual errors (e.g., typos) would be corrected, relying on DOF’s own records.
  • Final:
    • No more detailed, enumerated list of correctable errors (the old rules had a long section of examples).
    • Clerical errors: strictly mechanical or data-entry slip-ups.
    • Errors in description: must be resolvable by City agency records (Department of Buildings, etc.) as of the relevant taxable status date.
    • Discretionary or interpretive issues (how an exemption is applied, how an income-based valuation is derived) are excluded.
    • Slightly broadened from the proposal to include any City-agency documents, not just DOF’s website.

Key Takeaway: CER is now limited to plain factual mistakes. If the error involves a judgment call or interpretation, your avenue is the Tax Commission or an Article 7 lawsuit.

5. New “Sworn Statement” (Affidavit) Requirement

  • Under the final rule, every CER application must include a sworn statement disclosing any prior Tax Commission application or judicial review for the property and tax year(s).
  • Applicants must confirm whether they settled or otherwise resolved the matter, ensuring DOF can verify there is no settlement prohibiting a CER.

Key Takeaway: This adds a layer of due diligence for filers. You must be prepared to disclose and document any prior actions for the same property and year(s).

Practical Implications for Property Owners

1. Shorter Lookback:

    • The old six-year window is gone. Most corrections are limited to three years unless you show both extenuating circumstances and no undue prejudice to DOF.

2. New Owners Inheriting Errors:

    • You can file to correct older errors, but a refund is only possible if you prove you reimbursed the prior owner’s taxes or otherwise bore the actual tax burden.

3. Settlements = No Further Corrections:

    • Once you settle a given tax year, you cannot reopen it via CER—whether that settlement was with the Tax Commission or through a court stipulation.

4. Narrow Scope of “Ministerial” Errors:

    • CER is no longer a remedy for disagreements over valuations, exemptions, or classifications that hinge on legal interpretations or discretionary judgments.

5. Affidavit Requirement:

    • Expect to submit a sworn statement detailing prior administrative or judicial actions each time you file a CER application.

Best Practices: Preserve Your Rights

Given that DOF has restricted the administrative review process to purely factual or mechanical errors, it’s more important than ever to file a Tax Commission application every year if you suspect any valuation, classification, or exemption issue. If the Tax Commission hearing doesn’t produce a satisfactory outcome, consider commencing an Article 7 proceeding in Supreme Court to preserve your right to challenge assessments that go beyond simple data-entry mistakes.

Summary Checklist: Who Can File a CER?

  • Are you the property owner or “other qualified filer”?
    • You must be an owner (during or after the relevant year) or otherwise entitled to file an application under Section 163 of the NYC Charter.
  • Was the tax year at issue not settled with the City?
    • If there’s a settlement agreement covering that year, you cannot file a CER for it.
  • Is the error purely “ministerial” or fact-based?
    • If it involves discretion or interpretation of law, you must go to the Tax Commission or court.
  • For prior-year errors before your ownership:
    • Can you show proof that you actually paid or reimbursed those taxes?
      • If yes, you may get a refund. If not, DOF might correct the roll but no refund will be issued.
  • Will your application include the new sworn statement?
    • You must disclose any prior Tax Commission applications, court petitions, or settlements for the same property and tax year(s).

My Ongoing Advocacy

As noted above, I testified at the November 22 hearing and submitted written comments. I urged DOF to avoid penalizing innocent owners for errors outside their control and to maintain robust administrative corrections. Despite DOF’s tweaks—such as clarifying that new owners can correct past errors if they paid those taxes—the final rules still represent a significant tightening of the CER program.

I’ve personally saved owners millions of dollars in property taxes under the old rules by identifying and correcting everything from duplicated building square footage to overlooked demolitions. With these new, stricter guidelines, that level of large-scale relief will be harder to achieve. Property owners should be vigilant, review their assessments annually, and seek professional advice whenever they suspect an issue that might affect their property tax valuation.

Conclusion

While the final rules offer slight improvements over the DOF’s original proposal, they nonetheless tighten the process for correcting errors on your property tax assessment. The new three-year window, the narrower scope of correctable issues, and the new sworn-statement requirement all underscore the importance of proactive annual reviews and prompt action if you suspect a factual mistake.

If you have questions about how these rules might affect your property or tax strategy, consult a property tax professional. As always, I’m committed to helping my clients navigate these changes and pursue fair, equitable outcomes in New York City’s property tax system.

Benjamin Williams is a NYC-based property tax attorney who focuses on challenging real property assessments and ensuring fair, equitable taxation. He regularly appears before the NYC Tax Commission and the Department of Finance.