Long Island Residential Tax Assessments in the News

All of a sudden newspaper reporters are realizing that there are over 100,000 residential and 20,000 commercial tax assessment complaints in Nassau County alone each year. There seems to be a disproportionate number of complaints from the “affluent” communities on the North Shore and much less a proportionate number of complaints from the “less affluent” communities on the South Shore.

The Nassau Assessor has reduced many of the assessments protested on both commercial and residential properties. However, taxpayers have found out when their tax bills arrive that lower assessments do not necessarily mean lower taxes. Mathematically, when budgets do not decrease then assessments decreases mean higher tax rates. Another way to look at this situation is that if your neighbors or commercial competitors are getting tax assessment reductions, most assuredly your taxes are going to increase. Not checking your assessment every year is just plain negligent.

Tax assessments are not the only problem that taxpayers face. Tax rates vary from school district to school district, from town to town, from village to village. Some districts have literally double the tax rates of other school districts; so even assessment reductions are not going to create equality.

Would a single tax rate for all residences and a single tax rate for all commercial properties work? That is the way New York City has approached the problem. The worst part of the “broken” Nassau County system is that even after getting an assessment decrease the County has literally stopped issuing refunds.

But don’t give up your rights to protest and get a fair assessment. Eventually, the settlements will turn into real dollars.

Suffolk County Property Tax Grievance Filings - Small Window of Opportunity

Generally speaking, the fair market value of both residential and commercial property throughout New York State has decreased over the past few years. One would think that the Suffolk County assessor's would realize how the economy has adversely affected the local real estate values and thus lower tax assessments accordingly. No such luck. For the vast majority of properties in Suffolk County, the assessments have remained the same over the past several years. Making matters worse, although assessments have not decreased, tax rates have increased. Property owners and tax paying tenants must resort to tax certiorari proceedings in an effort to reduce their tax burden.

On May 1, 2012, the tax assessments for the Ten Towns in Suffolk County, NY will be published. Complaints to each of the town assessors can only be filed from May 1, 2012 through May 17, 2012. A word to the wise, have your Suffolk County tax assessment evaluated on May 1, 2012. Compare the market value the assessor "guesses" to the amount you would expect to receive on a sale of your property. If your assessment is appropriate, celebrate and make a donation to your favorite charity! However, if your assessment is too high, you must file a complaint with your assessor within the two week period listed above. If your property is in a Village, keep in mind a separate examination will need to be done for your Village tax assessment as the Village assessor's market value might be vastly different from the Town assessor's market value.

Beware, once the deadline passes, the assessment will be set in stone and the tax rate increase will not be known until the December bill.

Richard G. Fromewick is the Chair of the Tax Certiorari & Condemnation Law Practice at Meyer, Suozzi, English & Klein, P.C.

Where is My Nassau County Tax Refund?

Recently newspaper headlines in Nassau County have focused largely on the mass rounds of government employee pay cuts and firings. According to the County, the blame for these pay cuts and firings is a $300 million budget deficit.

I understand that expenses have to be cut. However, this layoff scenario in the County Attorney’s Certiorari Department, Assessment Review Commission and Treasurer’s Department is a classic “kick the can down the road” to the next administration. Who will suffer? Certainly, anyone entitled to a tax assessment reduction/refund might not have the wherewithal to wait for relief. Try and tell the mortgage company or the tax receiver “I expect to get an assessment reduction and refund, my attorney settled the case. However, it will be several years until I receive my refund. Can you wait?”

The failure of the Nassau County Legislature and Administration to work with NIFA in accepting over $100 million dollars in bonds to pay off the judgments ordering real estate tax refunds is not only disgraceful, it makes very little sense. Why would the County not want to payoff these interest earning judgments as soon as possible? The slower the real estate tax refund process is, the higher will be the ultimate payout because of the interest accrued. Wouldn’t the County rather spend their money some other way than just paying off interest due? Doesn’t the tax payer deserve their refund immediately?

CERCLA - ENVIRONMENTAL CONTAMINATION - POLLUTION & ITS EFFECT ON YOUR PROPERTY TAXES

Richard G. Fromewick is the Chair of the Tax Certiorari & Condemnation Law Practice at Meyer, Suozzi, English & Klein, P.C.

The real estate world is becoming increasingly environmentally conscious and polluted properties are not well-tolerated. As the mindset has formed on the environment there is increasing vigilance through requiring remediation of polluted properties. Whether the pollution is from above with chemicals and oil permeating the ground or chemical and oil leaks from underground tanks or even flowing underground from another property, citations for cleaning up are issued in increasing numbers.

The cost of clean up or remediation can be somewhat ameliorated by lower tax assessments due to the loss in market value. In a case of first impression litigated by my firm, the New York State Court of Appeals in Commerce Holding Corp. v. Board of Assessors of Babylon found that the taxpayer was entitled to deduct the cost of remediating from the market value of the property in its normal state.

This decision has a substantial impact on property owners facing an environmental clean up. Under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) of 1980, a property owner is liable for the cost of cleaning up polluted property even if that owner can prove that they were not in any way responsible for the contamination, as was the case in Commerce. Under CERCLA, the owner is considered a “potentially responsible party” and will be strictly liable for the clean up costs. This is true even if the property is purchased after the contamination has been discovered. This standard requires owners of real estate to take extra precautions because the cost of any clean up will be imposed on them if the property is contaminated or becomes contaminated.

To those owners who have been cited and must pay clean up costs, the decision in Commerce offers some relief because it allows them to petition the assessor to reduce their tax burden on the property. Under Commerce, the assessor must first determine the value of the property as if it was uncontaminated and then subtract the entire remaining cost of the clean up from that value. This reduction takes into account that anyone looking to purchase the property would require that the sale price reflect the cost of cleaning up the property. In effect, this decision recognizes that property worth $1 million if uncontaminated but requiring $500,000 worth of environmental clean up is only worth $500,000 and should be taxed accordingly.

Purchasing and owning real estate is becoming more complicated all the time. The key to making a profit despite these complications is to be well-informed about all of your options, particularly when dealing with complex matters such as environmental clean up and taxes. If you have been cited for contamination, you have the ability to have your property taxes reduced to reflect the reduced value of your property. If you have been paying clean up costs, you should verify that your assessment was adjusted to reflect the cost of the clean up. You can check your property assessments in Nassau County by going to http://www.mynassauproperty.com/ or by logging on to http://www.mlsli.com/. Typically, the assessor will not adjust an assessment on its own, leaving it up to you to make an application to reduce the assessment through a tax certiorari proceeding.

GREAT ASSESSMENT NEWS!

Most municipalities, including Nassau County, assess properties at a fraction of its estimated fair market value. The Nassau County Assessor has claimed for the past several years to be assessing commercial properties at 1% of its fair market value. However, we have just entered into an agreement with the Nassau County Attorney’s Office to negotiate the 2011/12 and 2012/13 assessments as though the assessments are based on .905% of the actual fair market value.

What exactly does this mean?

If a property is assessed at 10,000, the County Assessor’s website would claim a fair market value of $1,000,000. However, due to the agreement mentioned above, the County Attorney’s Office will negotiate tax reduction proceedings as if the property is assessed as worth $1,105,000.

Thus, if the property is really worth $1,000,000, and the County agrees to negotiate as if the property is assessed at $1,105,000, then the taxpayer would get a 10% reduction in assessment to bring their estimated fair market value down to $1,000,000.

The moral of this story … there is more than one way … to get a tax reduction.

NASSAU REAL ESTATE TAX ASSESSMENTS IN TURMOIL

Many Nassau County tax assessments have been reduced, but beware! Tax rates will have to be increased to meet the budgets. Almost daily we see a news story or opinion article on the outdated and broken Nassau County real estate tax assessment system. The probable take over of Nassau finances by NIFA (Nassau Interim Finance Authority) exacerbates the situation. Recently the County Executive announced a private appraisal firm would negotiate the real estate tax protests with the tens of thousands of homeowners complaining about their assessments. The administrative review of the commercial cases has all but stopped. There is a lot going on but so far the system has become more complicated and cumbersome. Maybe that's the plan.

NASSAU & SUFFOLK ASSESSMENT ERRORS CAN BE CORRECTED

Everyone paying real estate taxes for commercial property should verify their assessments.

Substandard tax assessment systems create many errors.

On Sunday March 21, 2010, Newsday featured a lengthy article about Nassau County's substandard real estate tax assessment system. It was an extremely unflattering story and, regrettably for Nassau County real estate taxpayers, it was all true. Nassau's assessment system is broken and has been in disarray for many years. There are over 420,000 individual parcels in Nassau County, yet the County does not have the infrastructure to value them correctly. There are several different computer systems used in the assessor's office, unfortunately the programs frequently contain different information due to human errors made while inputting data from one system to another.

Examples of assessor's office mistakes over the years include the assessment of a half-acre parcel as a two-acre parcel, and the assessment of a three bedroom split-level house as a five bedroom colonial house. Some mistakes will have no affect on the real estate taxpayer because the assessment, despite erroneous descriptions, can still be based on the correct market value. However, some mistakes can result in unrealistic market values and inflated real estate tax bills. For example, a converted residence containing a small medical office being assessed as a commercial property with commercial tax rates was reversed back to a residential property tax rate, resulting in a 75% reduction of the taxes.

Assessments have to be protested every year, with a very small window of time in which to do so. The tentative Nassau assessment roll is released on January 2nd and protests must be filed by March 1st. The good news is that assessor mistakes are in a category of their own and can be corrected, even if a protest was not filed prior to the years March 1st deadline.

Everyone paying real estate taxes for property in Nassau County should go to www.mynassauproperty.com to verify the County's description of your property and compare your assessments to similar properties. You can also do this by logging on to www.mlsli.com. It only takes a few minutes, and in the end could generate substantial savings.

If you thought living or owning property in Suffolk County could solve all your assessor woes, think again. Not only is the Suffolk County protest filing deadline shorter than Nassau County (the tentative role is released May 1st with a May 18th protest filing deadline), the Suffolk County town assessors makes their share of mistakes as well.

Recently, it was discovered that someone was paying taxes on a parcel of land that was completely submerged under water. The County refused to believe that the land was underwater but pictures proved otherwise and a reduction was obtained. In another case, an old 40-foot tall industrial building previously used as an aircraft hanger was still being assessed as though the owner was using all 40 feet of space. After the assessor was made aware of the fact that it was being used for assembly work at tables, with no planes in site, a large reduction was obtained, as the unused height of the building was obsolete.

Unfortunately for Suffolk County residents there is not a single website to log into and verify assessment records. Give your local Town and Village assessors a call and find out how you can obtain your property information. You might be amazed at what you have been paying taxes on.