NYC Comptroller: A Framework for Property Tax Reform

A framework released by the New York City Comptroller proposes to “bring together long overdue reform for overtaxed homeowners with changes to multifamily taxation in the wake of the expiration of 421-a,” instead of the numerous exemptions and abatements to lower tax rates for developers of multifamily housing passed by New York State rather than dealing with structural flaws in the property tax system. The comptroller’s framework builds upon 2021 recommendations by the New York City Advisory Commission on Property Tax Reform. Addressing the three core problems with the current tax structure identified in December 2021 by the Advisory Commission, the proposed recommended changes would address the inequities between homeowners in different neighborhoods and building types, while including a phase-in and protections for potentially vulnerable homeowners in areas where rates would rose over time. Under the current tax system, which is generally opaque and difficult to understand, the different building types (1-3 family home, co-ops and condos) are not subject to the same rules for valuations; large rentals are taxed at approximately double the rate of condos and co-ops; and the differences in effective tax rates across neighborhoods is too wide. Recommended reforms within the framework are intended to bring “fairness and transparency, incentivize new rental housing production, tie tax breaks to actual affordability, and include a 21st century Mitchell-Lama program for permanently affordable cooperative homeownership.”