Last month, the New York City Department of Finance (DOF) released its Tentative Assessment Roll for the 2023/2024 fiscal year. A Notice of Proposed Value (NOPV) was mailed to the address on file and reflects a taxable status date of January 5, 2023. Appeals for most commercial properties must be filed by March 1.
The city arguably has the nation’s most complex property tax assessment system. The appeals process requires experience and tremendous attention to detail. Without proper guidance, taxpayers can find themselves in a situation where their grievances are rejected or an appeal to the Tax Commission yields little to no savings. Often, taxpayers end up waiting years for resolution of their cases because the appropriate appeal issues are not brought to light at the appropriate time and at the correct venue.
In a typical market, taxpayers have been content to simply pass the responsibility for managing and mitigating taxes on to the tax certiorari representative without gaining a real understanding of the ramifications of the new assessment. In today’s uncertain environment, owners and managers need to proactively approach all the facts pertaining to a property’s assessed value.
Many taxpayers will be surprised to learn that the proposed market values for fiscal year 2023/2024 across all four tax classes represent an increase of more than 6%. The data utilized by the DOF in deriving these market values was pulled from Calendar Year 2021.
The DOF assumptions based on two-year-old data have created a disconnect between a perceived market value growth and the reality of the market. This has impacted all property types, particularly within the office sector. The DOF is understandably reactive, and without sufficient data points struggles to accurately reflect the behavior of buyers and sellers, who are much more agile in their approach to pricing. Rising interest rates have dramatically slowed the pacing of deals. Fewer data points create a larger margin for error and more opportunity for appeal savings.
When reviewing the 2023/2024 NOPV, property owners and managers should consider the following questions:
- What is my new market value, and what are the implications for taxes payable going forward?
- How did the DOF calculate my market value? Is it inflated?
- Does the proposed value reflect property-specific issues that could have a negative impact on my sale price?
- Can I request a two-year review at the Tax Commission this year?
- What years do I have open at the Law Department? Are cases just sitting there?
- Did I receive any offers at the Tax Commission last year? If not, why not?
A well-informed taxpayer should be able to answer all these questions with relative ease. If you can’t answer these questions, the time is now to take a more deliberate approach to property tax management.
Ryan can help bring you up to speed on New York City property taxes. The experts at Ryan will demystify the tax certiorari process to provide clarity and increased certainty at every step in the process.
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TECHNICAL INFORMATION CONTACTS:
Steve Thompson
Principal
Ryan
212.871.3901
steve.thompson@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.
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- Steve Thompson
- Property Tax
- New York