A property tax hike could be coming for Brooklyn homeowners with the city’s proposed reforms

Brooklyn homeowners could see an increase in their property tax bills in the coming years, if the reforms proposed by Mayor Bill de Blasio and a commission he appointed to study the issue are implemented.

Kings County is the only one of five boroughs where the median “effective tax rate,” or taxes owed for every $100 of a property’s market value, would increase if four tax system “structural reforms” The city’s Byzantine land tax was to come into force.

The borough’s median “TEN,” as a new report calls it, would rise from $0.63 to $0.80 per $100 of property value.

The reforms are outlined in the final report of the Mayor’s Property Tax Reform Commission, which was formed in 2018 to study the system and recommend changes. The report was released on Wednesday, just days before de Blasio leaves office and his successor, outgoing borough president Eric Adams, assumes the role of city chief executive.

Perspective Lefferts Gardens. Photo by Susan De Vries

Brooklyn residents living in townhouses in areas where values ​​were historically low and have only risen dramatically in the past decade as the borough has gentrified, have been protected by a plank in the tax code that caps the amount that annual tax assessments can increase for small property owners. The city has already raised taxes in these areas in recent years, but the new proposal would significantly speed up the increase.

Property values ​​have risen all over Brooklyn since 2012, but central Brooklyn areas such as Bed Stuy, Prospect Lefferts Gardens, Bushwick and East Flatbush could see the most dramatic tax spikes. These areas are home to thousands of longtime homeowners of color, many of whom are low-income and elderly, and include homes that have been owned by the same family for several generations. Under the proposed changes, property taxes in these neighborhoods could go from about $150 to about $1,200 a month in just five years.

The cap has kept property taxes relatively low for Brooklyn townhouses, even though the actual Brownstone Brooklyn market has skyrocketed in recent years.

One such beneficiary of the system, historically, has been Mayor Bill de Blasio, who owns two wood-frame townhouses in South Park Slope, where values ​​have been lower than the main brownstone area of ​​the north slope. During her 2017 re-election effort, her Republican opponent Nicole Malliotakis (now a congresswoman) frequently cited the fact that the mayor had a significantly lower property tax bill on her Park Slope pad than she had paid. for his home on Staten Island, although the mayor’s home is valued at nearly four times the dollar amount of his home.

According to city records, the mayor and his wife, Chirlane McCray, owed just $4,480.34 in annual property taxes last year on their 11th Street home in Park Slope. The property was appraised at $1.885 million the same year, although it was down slightly to $1.568 million this year. They bought the house in 2000 for $450,000, according to The New Yorker.

The property tax commission is calling for the removal of growth caps, calling them “among the main drivers of the current inequitable system”. Under the new system, which would run for five years, tax bills would begin to reflect year-to-year changes in a property’s fair market value.

Since Brooklyn would see an increase in bills under the plan, the commission has proposed several instruments to reduce the rise for those who are asset-rich but cash-poor, a category that includes many long-term townhouse owners. dated. The proposal includes “targeted relief for homeowners” in the form of tax exemptions on the value of the home beyond a certain point, which phase out as personal income and property values ​​rise. She is also calling for a “circuit breaker”, which would allow those whose property taxes represent a substantial part of their income to obtain a refund from the City’s coffers.

With the proposed relief measures, Brooklyn would still be the only borough to see median tax bills increase, but the increase would be much smaller, down to $0.71 per $100 under a rate waiver. progressive and $0.75 for a flat exemption.

homes in south prospect park

Prospect Park South. Photo by Susan De Vries

Other “structural” changes proposed across the board include revamping the system’s property categories, combining one- to three-unit homes with condos, co-ops and small rental buildings. The package would also eliminate assessments based on nearby “comparable rental properties”, which he said has created a situation where buildings are assessed for a fraction of what they are worth. And finally, it would put an end to “fractional” appraisals and assess all properties at “full market value”.

Since they were announced with just a few days left in de Blasio’s mayoralty, whether the reforms go into effect will fall to Adams. A spokesperson for the mayor did not respond to a request for comment.

In statements released with the report, commission members urged the new mayor to consider the report – the first “top-down review of the property tax system by a government-appointed commission since 1993”.

“The work of this temporary commission charts a roadmap toward real estate tax fairness in New York’s property tax system, which has treated too many New Yorkers unfairly for decades,” said Allen Cappelli, member of the commission, practicing attorney from Staten Island. “What scares me the most is that if the government doesn’t take the necessary steps for fairness and transparency now, the inequality between landlords is going to get more and more disparate every year to come.” — Additional reporting by Cate Corcoran

Editor’s Note: A version of this story originally appeared in Brooklyn Paper. Click here to see the original story.

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Penny D. Jackson