Why Do My Nassau Property Taxes Go Up, Up, Up

Why were the Nassau School Tax bills higher than ever?

There are three reasons:

1. School budgets continue to increase, higher than the 2% NYS cap; 
2. There are precious few properties being built, therefore, virtually no new assessments are being added to the tax roll; and 
3. If there are assessment reductions in the district and no new assessments added, then it’s simple math that tax rates have to increase. 

For example: If the total assessments in a district decreased from $1,000,000 to $900,000 because some properties received assessment reductions, the tax rate has to increase by 11% just to get the same money. And, on top of that the budget has to increase.

In fact, in the town of Hempstead School District 27 the commercial taxes increased over 13%. The residential tax rate increases averaged 5%. The (DAF) Disputed Assessment Fund which affects only commercial properties was on this October’s school tax bill and unexpectedly decreased the taxes payable. Be prepared, there will be an increase for the DAF on the general tax bill.

The next protest period in Nassau and New York City is in January and the Suffolk protests are in May.

Nassau Commercial Tax Bills (DAF)

If you own commercial property, your new October school tax bill probably has a lower tax then last year because the Disputed Assessment Fund (DAF) reduced the taxes payable.  Everybody thought the DAF was to be an additional tax to build up a refund bucket. However, the Disputed Assessment Fund charge was a reduction on the tax bills.  The Assessment Department has not explained why a charge resulted in reducing the tax payable.  What will happen on the January 2017 general tax bill is anybody’s guess. As a Tax Certiorari lawyer who files for commercial clients, I am mindful of real estate taxes. This unexpected decrease in school taxes might be welcome in the short run but I am concerned that there will be a large increase in commercial property taxes in the coming year. I will continue to reach out for information on the DAF taxes.  Of course, the school taxes increased for Nassau residential properties.

Proposed New Licensing Requirements for Non-Attorney Tax Reduction Firms in Nassau

Nassau County’s program to license non-attorney tax assessment firms has already started – if not voted in yet. There are many firms that have sprouted up in the past few years, some of whom may not be as knowledgeable about the business as they should be. These firms will now be licensed and, hopefully, regulated. In a Newsday article published on September 20th entitled, “Edward Mangano’s budget would hike small business license fees,” it states, “In documents filed with the county legislature, officials contend a license for tax assessment reduction firms is needed to ensure “senior citizens are not victimized by unscrupulous” firms not run by practicing attorneys.”

As of now, there are already licensing requirements in Suffolk County for non-attorney tax grievance firms, which are regulated by the Suffolk County Consumer Affairs Department.

We all get many, many, many solicitations to reduce the taxes on our homes. Tax certiorari for small claims assessment review (SCAR) has become a cottage industry. Most cases in Nassau are settled without cash refunds as the assessments are lowered at hearings before the tax bills are sent. Too many flyers come with outlandish claims of reductions on other properties in the area. However, there is no accountability of whether those reductions were even close to what the property should have received as a reduction. There is no rule-of-thumb percentage reduction. Every property must be individually analyzed, and Suffolk cases are even more complicated because of the 10 different town procedures that require a more rigorous analysis and hearing representation.

Tis the season where we will all be bombarded with mailers – let the buyer beware!

   

Nassau Taxes Are Up, and Coming Soon

The October bill is the first half of the school tax for the 2016/17 tax year. If the assessment was reduced by a tax certiorari complaint in January 2015 complaint, the tax bill in October 2016 should reflect the reduced assessed value. The January 2017 general tax bill should be based on the same reduced assessed value. However, commercial properties will have a much higher tax than normal because of the new Disputed Assessment Fund (DAF). There is little information about this new fund – but guaranteed there will be 10 – 20% higher taxes to create the DAF.It is too late to complain about the assessment on the October 2016 school tax or the January 2017 general tax. The tax certiorari complaint you can file in January 2017 is for the 2018/19 tax year. Sounds complicated and a little wacky – well that’s the New York State mandated assessment procedure for Nassau County.

Disputed Assessment Fund –Nassau Real Estate Taxes

According to the new Disputed Assessment Fund (DAF) Program, any taxpayer who filed a complaint/grievance/protest on a commercial property to the Assessor in January 2016 will receive two bills on the January 2017 general tax statement. Depending on the amount of the assessment the taxpayer claims is too high that disputed amount will be put into the DAF account. The rest of the assessment will be paid to the school and other taxing districts. So far, so good – now the kicker. If a commercial taxpayer claims a 20% over assessment, the DAF will get 20% of the taxes and the taxing districts will only get 80% of the taxes. Clearly, the tax rate for every commercial taxpayer, whether they claim an over assessment or not, will have to be substantially increased to make the school and other taxing districts whole. The assessor will have to make a decision for each protesting taxpayer how much to put in the DAF, depending on what percentage the taxpayer is disputing. If the taxpayer does not ultimately reduce the assessment by at least that amount that is in dispute, the extra money reverts to the taxing municipalities. There are no rules and regulations available yet as to how much the January 2017 tax rate will increase and what the bill will look like. Rest assured the commercial taxes will be increased to create a fund - a Disputed Assessment Fund - so that there will be money available for the inevitable refunds.

NASSAU COUNTY – DISPUTED ASSESSMENT FUND (DAF)

Why is this year different from all other years? That is the commercial taxpayer’s question. The answer is not simple and it might even change. This year, the real estate tax rate will increase for every commercial taxpayer. Each taxpayer that files a protest/complaint/grievance against Nassau commercial real estate tax assessments will pay on two different assessments. The portion of the assessment that the taxpayer is disputing and wants to have reduced, will go into a separate fund called the Disputed Assessment Fund (DAF). Since the school and general tax districts will receive tax payments only on the portion of the assessment not in dispute, the tax rate will have to increase. The plan is for the school and general tax districts to receive full payment albeit on a lower assessment. Therefore, the tax rate on Nassau County commercial, Class 4 properties will increase for every commercial taxpayer whether the taxpayer complains or not. The schools will not suffer, only the commercial taxpayers will suffer. The details of how the January 2017 tax bill will look are still “in dispute”. More to come as the details are worked out.

Suffolk County Real Estate Tax Reduction

You can't tell a book by its cover and you can't tell a property's taxes by its assessment. 

There is a patchwork quilt of tax rates and tax assessment ratios in the 10 towns and 30 or so villages in Suffolk County. Babylon, Huntington, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton, Shelter Island and Southold will all have new assessments on May 2, 2016. Protests to most of the villages are filed in February. Since the tax assessments are not made at full market value, to correctly protest you must have knowledge of the New York State assessed ratio of assessment to market value. A one million dollar commercial property in Babylon is assessed at about $12,000, in Huntington at approximately $9,000 and in Riverhead at about $145,000 - quite differing ratios and only a three week protest period to complain! Residential properties have similar wide-ranging ratios.

Every Commercial and residential property should be evaluated every year to determine if the assessment is exaggerated or erroneous.

When I go to the mynassauproperty.com website, my property’s market value seems low. Does that mean I shouldn’t grieve?

On January 4, 2016 the Nassau County Assessor published the new real estate tax assessments for all residential and commercial taxpayers. The filing period of the Assessment Review Commission (ARC) to protest, grieve and make complaints of the assessments is open until March 1, 2016. Since the assessments are not made at full market value the ratio of assessment to market value changes every year. The market values on the Nassau County website are artificially much lower than the actual values that you are being assessed at because the Assessor does not use the current ratio. The estimated market value assigned by the Assessor is probably higher this year than last year. This is because the County does not want to show you how high they are actually assessing your property - in essence, they are misleading website visitors.

Everyone should have their assessment professionally checked every year; if no timely protest is made you are stuck with what might be a much higher value and a greater tax burden.