Shark Bites is an occassional Curbed feature in which our friends from property research hub Property Shark drop by to offer analysis from their broad array of maps. Without further ado, let's turn it over to them.
[Map showing increases in city assessors' property value. The darkest red areas show sections of the city where city real estate assessments tripled or more.]
According to city officials, market values jumped 19% in 2006. Even more surprisingly, the NYTimes printed this "fact", stating, "The data comes from the most authoritative snapshot of city property: the annual assessment roll". Move over, Jonathan Miller! (And someone tell the rest of us in the real estate industry who mistakenly thought that values were flat or slightly down all year long.)
The real story is that the city finally got serious about correcting their estimates of market value, which for vast sections of the city had been a decade or two out of date. Last year the city thought my brownstone in Harlem was worth around $80K (for that price I'll buy two more!), and that was higher than a lot of neighbors who enjoyed property taxes calculated on values as low as $29K (I'll take three!) PropertyShark sample property 104 W. 113th Street went from $72K to $1.02M. (Todd Stevens of Elliman sold it for $1.8M in August of 2004.)
So for those of us in Harlem and Bed-Stuy who enjoyed property taxes more suitable for a double-wide in the Poconos, the party is over. Kind of. The state limits the rate at which property taxes can rise. For 1-4 family units, the increase limit is 20% every five years. So this year, if you're paying just $2,124 on your $1.8 million Harlem investment, you might pay just $2,294 next year.
But there's a gotcha for the homeowner because the law has a loophole for the city: increase in value due to renovations or new construction is immediately taxed at the full value. As a practical matter that used to mean that every now and then the property tax people (DOF) talked to the building permit people (DOB), and anyone with a building permit had their taxes raised to the full amount. That bathroom remodel can cost you. Last year this happened to a bunch of Harlem homeowners. Lead by Caren Chesler at 122 West 121st, they screamed bloody murder and DOF Commissioner Martha Stark backed down. So now things are a little less clear.
· City Assessor's Valuation Map [Property Shark]
· Shark Bites Archive [Curbed]