NYC-WTC_000195490

NYC 9/11 Public Portal Document

REAL PROPERTY TAX REAL PROPERTY TAX 1992-2002

The real property tax is projected to 10 account for 38.3 percent of tax revenue in 2002, or $8,643 millioti. 8

Tax Base and Administration: In December 1981, Chapter 1057 of the Laws of 1981, comtnonly referred to as ! S.7000A, amended Article 18 of the * '-H Real Property Tax Law, significantly 2 I iSjh restructuring the tax beginning in 1983. II Prior to that time, a single tax rate was applied to all taxable real property, 0 ------- l_t-------------- ---- —L------------- ------- ------- ------- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 It i Hi regardless of type or use. With the enactment of S.7000A, real property was / Fiscal Year

classified into one of four classes; Class 1, consisting of one-, two- and three-family residential property and small Condominiums; Class 2, consisting Si of all other residential property including multi-family cooperatives and condominiums; Class 3, consisting of utility real property; and Class 4, consisting of all other real property, such as office buildings, factories, stores, lofts and vacant land.

All properties in the City are reassessed each year between June and January. In mid-January a tentative assessment roll is produced and taxpayers are notified of their new assessment level. Taxpayers may protest this tentative assessment level by applying to the Tax Commission for a hearing. Owners of Class 2, 3 and 4 properties must file their applications before March 1; Class 1 property owners must file by March 15. The assessment may be protested because the underlying property is misclassified, or because it is unlawful, unequal or excessive. Adjustments resulting from this process or from Department of Finance (DOF) changes by notice are integrated into the final assessment roll, which is normally released in late May,

Properties are not assessed at full market value, but at some proportion of market value. The Class I assessment percentage has varied over time. It was 18 percent of market value in 1983, but has dropped over time to eight percent currently. The Class 2 and Class 4 assessment percentage was reduced to 45 percent Ii from 60 percent in 1985. Class 3 properties are assessed either by DOF or by the State of New York Office of Si Real Property Services (ORPS). Prior to 1994, locally assessed property (plant and equipment, known as real i estate of utility corporations, or REUC) was assessed at 50 percent. Special franchise property*, assessed by i ORPS, used the State equalization ratio,/which fell to 22 percent in 1993. In 1994, a uniform 45 percent I assessment ratio was adopted for all type? of Class 3 property.

The law also established restrictions on annual assessment increases. Assessments of Class 1 properties may not increase by more than six percent annually and 20 percent over five years. Class 2 assessment increases for rental buildings ofTess than 11 units, and since 1994, cooperatives and condominiums of less : than 11 units as well, are limited to eight percent a year and 30 percent over five years. For all other Class 2 and Class 4 properties there are no annual restrictions on assessment increases. Instead, market value changes are reflected in changes to actual assessments and are phased in over five years for tax purposes. Both increases and decreases are phased in. The interim value during the phase-in period is represented by the S' transitional assessment. The billable or taxable assessment amount in any given year is the lower of the actual 6r transitional assessment/ Increases that are the result of new construction, demolition, alterations or change I)-. in taxable status (physical changes) are taxable immediately and are not subject to the assessed value caps or the phase-in requirement. There are no statutory limitations on annual assessed value changes in Class 3. I

JI * The right to locate, maintain and operate property in the public domain: special franchises cover not only tangible properly like pipelines, cabled and other equipment on, below, or over public property, but also the intangible right to use the public right-of-way. f 32 ■ h I'

NYC-WTC_000195529