New York property tax cap set at 2% for 2023
Soaring inflation costs have led to New York’s cap on property tax increases being set at its upper limit of 2%, State Comptroller Tom DiNapoli’s office announced Wednesday.
New York sets its property tax limit at the rate of inflation or 2%, whichever is lower. This is the fourth time since 2019 that municipal governments have seen the growth of their tax collection set at this amount.
The development comes as enhanced federal assistance in the wake of the COVID-19 pandemic for local governments is set to end.
“Allowable tax levy growth will be limited to 2% for a second consecutive year,” DiNapoli said. “Just as local governments receive their final round of federal funding under the American Rescue Plan Act, they are facing economic challenges that will likely result in higher-than-expected or projected costs, making it more difficult to meet the tax cap when preparing their budgets for 2023.”
The 2% limit will affect tax calculations for counties, cities, fire districts, 44 cities and 13 villages whose fiscal years are aligned with the calendar. The cap does not apply to the state’s largest municipality, New York.
This year’s inflation factor was calculated at 7.17% and more than half of the state’s county and city governments, as well as cities and towns that budget on schedule, could have costs higher than the amount of pandemic aid they should receive. .
New York’s tax cap has been in place for 10 years as a mechanism to limit the growth of the nation’s highest property taxes.