NYC Offers General Reductions in Real Estate Taxes Due to COVID-19 – But Can More Be Done?

By Deana L. Wetzel  |  February 8, 2021

As a result of the COVID-19 pandemic, the NYC Department of Finance (DOF) has proactively reduced the average assessments for the different property asset classes—a decrease which has never before been done by the DOF. However, property owners who have recently received their assessments may be wondering why they don’t see more of a benefit reflected. This is because the DOF has not yet received building data that reflects 2020 COVID-19 activity for each building. Instead, the assessments are based on 45% of the market value determined by the city based on the stabilized historical income and expense filings (RPIEs) submitted by property owners as well as filed certiorari reports.

The January 5, 2021 assessments are the DOF’s estimated determination of the property value. It is important to note that assessments are phased in over a five-year period, therefore, there might be a lingering effect of an assessment increase from prior years in the current tax bills. In addition, tax rates by asset class can potentially change and be implemented earlier than usual in relation to the NYC budget.

Property owners who are unhappy with their assessment and wish to challenge it must do so through a certiorari filing. The process is lengthy, and is described in full in a recent article entitled “What It Takes to Reduce Your Real Estate Taxes in NYC” by Neil Sonenberg.

Below is a helpful list of important dates during the certiorari process. It is important to note that these dates cannot be extended.

  • January 5 – Properties are assessed.

  • January 15 – Tentative Assessment Roll published by DOF.

  • March 1 – Applications for Correction of Assessment with the Tax Commission for Class 2,3 & 4 due by 5pm.   

  • March 15 – Application for Correction of Assessment with the Tax Commission for Class 1 due by 5pm.

  • March 24- Deadline for filing Supplemental Income & Expense forms with the Tax Commission for properties with an assessment of over $750,000.  Properties with an assessment of $5M or more must be certified by an independent public accountant.

  • April – September – Tax Commission hearings are held.

  • May 25 – Final Assessment Roll published by DOF

  • June 1- Deadline for RPIE filing 

This year, certiorari forms are critically important to paint the exact health of the building, as this will be a property owner’s chance to prove how badly the COVID-19 pandemic has affected an individual property in 2020. Contact your tax advisor or Marks Paneth relationship partner to discuss a certiorari filing for your property.

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About Deana L. Wetzel

Deana L. Wetzel, CPA, is a Partner in the Real Estate Group at Marks Paneth LLP. Ms. Wetzel specializes in audit and consulting engagements for both commercial and residential real estate clients as well as co-ops and condominiums and is involved with several high-profile real estate clients. In addition to advising her clients on all facets of accounting and tax issues, she assists with many different types of real estate transactions, including acquisitions, dispositions and... READ MORE +

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