To the surprise of many commercial property owners, the City of New York finalized the new tax rates for 2020/2021 beginning July 1, 2020 and ending June 30, 2021. These rates are typically not posted until November annually, and while the rates for residential are down, commercial property increased.
The following is a comparison of the annualized commercial tax rates for tax years 2019/2020 and 2020/2021:
|
|
Tax Year 2019/2020 |
Tax Year 2020/2021 |
|
Class 2 (4 or more family, co-ops, condos) |
12.473% |
12.267% |
|
Class 4 (nonresidential) |
10.537% |
10.694% |
The new tax rates were not in place for the July 1, 2020 tax bill. Adjustments will be made to subsequent tax bills to reflect the changes. The tax rates to be applied for the second half of tax year 2020/2021 are as follows, beginning with the tax bill due January 1, 2021:
|
|
July 1, 2020 Rates |
January 1, 2021 Rates |
|
Class 2 (4 or more family, co-ops, condos) |
12.473% |
12.061% |
|
Class 4 (nonresidential) |
10.537% |
10.851% |
With the release of new tax rates in July, it is synchronized with the final assessed property values; therefore, all commercial properties, according to building class, will have their respective tax rate applied for the entire fiscal year. These rates will have a greater impact on properties with an assessed value less than $250,000 as the taxes are due quarterly. Properties with an assessed value of $250,000 or greater have semi-annual tax due dates.
In June, the New York City budget of $88.19 billion was approved. The fiscal year began July 1, 2020 with a revenue shortfall of more than $9 billion. The city is dependent upon the tax revenue from sales tax, hotel tax, real property tax, and other taxes. Real property taxes are the city’s single largest source of tax revenue. The impact of COVID-19 will last for the next two to three years in New York City.
Please reach out to the experts at Ryan if you are seeking guidance on deadline extensions. You can also visit our COVID-19 Updates site, as our experts are in constant contact with the jurisdictions and make updates to the site as notifications become available.
TECHNICAL INFORMATION CONTACTS:
Michael Allen
Principal
Ryan
703.746.0022
michael.allen@ryan.com
Ginna Currie
Senior Consultant
Ryan
212.847.0127
ginna.currie@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.