What's happening
This bill requires property tax assessments in New York City to increase gradually for certain properties after a title transfer, based on market value.
Why it matters
Smooths sudden tax hikes for new property owners. Instead of immediately raising property tax assessments to full market value after a sale, the bill phases in increases over three years, making tax increases more predictable and manageable for buyers of class one (1-3 family homes) and class two (multifamily buildings) properties in NYC.
Targets properties with below-market tax assessments. The changes only apply if the property's market value (as determined by the NYC Department of Finance) is higher than its current assessed value, focusing on properties that have historically benefited from lower tax assessments.
Limits loopholes for under-assessed real estate. By updating the assessed value after each qualifying sale, the bill reduces the incentive for long-term owners to hold onto properties primarily for tax reasons and aims to create a fairer property tax system in high-demand neighborhoods.
Could affect housing costs and neighborhood dynamics. Gradual increases in property tax assessments may influence real estate prices, landlord decisions, and, ultimately, rents or housing investments, especially in areas with rapidly rising market values.
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Who cares
Headline styles
Assess Property After Sale
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to local government
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7631
IN SENATE
February 3, 2020
Introduced by Sen. BENJAMIN -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the real property tax law, in relation to implementing transfer assessments for certain classes of property in a city with a population of one million or more
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1805 of the real property tax law is amended by adding a new subdivision 7 to read as follows:
7. Notwithstanding any provision of law to the contrary, in any special assessing unit wholly contained within a city, beginning with the assessment roll completed in two thousand twenty-one and for each subsequent assessment roll, the assessor shall determine a transfer assessment for any class one or class two parcel which has had a transfer of title within the fiscal year where the market value of such parcel, as determined by the New York city department of finance, is greater than the assessed value of such parcel. Such transfer assessment shall be applied to the first assessment roll after the transfer of title of such parcel and for each of the succeeding two assessment rolls by computing difference of such parcel's assessed value and the market value, as determined by the New York city department of finance, of such parcel when the transfer of the title of such parcel occurred and increasing the assessed value of such parcel by one third of such difference on each such assessment roll.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14959-01-0
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to implementing transfer assessments for certain classes of property in a city with a population of one million or more
Purpose
To apply a market-valued assessment upon real properties upon their transfer.
Summary of provisions
Section 1 amends the Real Property Tax Law to include a new subdivision 7 to stipulate that, from 2021 onward upon the transfer of title, any class 1 or class 2 property in a special assessing unit wholly contained in a city shall have its market value as the basis for its assessed value. The increase to market value assessment of the property shall take place by thirds over three years.
Existing law
Properties in New York City have a cap upon the increase of assessed value of 6% per year to reach a maximum of 20% over five years. This cap stays with the property upon transfer to a new owner.
Justification
While property tax caps have the effect of reducing the tax burden upon a property owner, uneven increases in real estate property values over time have created a vastly uneven tax burdens for property owners in New York City. With a property tax caps in place for many years, we now have a situation where those with properties with greatly appreciated market values pay a vastly lower effective tax rate than those who own proper- ties whose values have appreciated more modestly. As a result, people with expensive properties can pay an effective tax rate that is as little as one-sixth of those with more modestly valued homes.
This removal of the assessment cap applies only to properties being transferred, so that people staying in their homes will continue to receive the benefit of the cap, while those buying expensive properties will not receive a tax advantage for buying an expensive home.
Legislative history
New Bill
Fiscal implications
None
Local fiscal implications
None.
Effective date
Immediately, beginning with assessment year 2021.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.