Long Island Real Property Tax Alert

Farrell Fritz, P.C.

Pandemic Related Changes to the Property Tax System Have Been or Will Be Restored

Last year, grievance filing deadlines and tax due dates were changed by nearly every jurisdiction to suit the circumstances.  Most, if not all of these accommodations, have been stripped away.

Should changes occur, we will continue to post them on our firm’s website.

For most homes, the pandemic pushed values higher as city dwellers sought a suburban refuge and mortgage interest rates remain at historic lows.  This trend has yet to abate.

Commercial property is a different story.  The pause/shutdown and partial reopenings continue to negatively impact businesses and the properties that they occupy.  Perhaps hardest hit is the office market where tenants’ employees continue to work from home.  This negative, perhaps structural change, makes grieving your commercial property taxes more critical than ever.

How Did the Nassau County Reassessment Affect the 2020/21 Tax Bills?

Last year, we highlighted reassessment issues to watch for.  Below are our observations from last year and what we observed:

  • Any commercial assessment increase not related to new construction must be phased in over the next 5 years. This was done generally but there were a number of implementation errors.  If your 2020/21 assessed value (AV) is greater than your 2019/20 AV, please check your tax bills to make sure your taxable AV is less than the total AV.
  • For homes – the “Taxpayer Protection Plan” will phase in tax increases for properties with rising assessed market values. The phase-in will appear as an exemption on your tax bill. As observed last year, the 5 year phase-in benefits properties with rising assessed market values but hurts properties with declining assessed market values.  Because the phase-in was based upon the tentative (unreduced) 2020/21 AV, certain properties received out-sized drops on their tax bills.
  • For the 2021/22 tax year, many properties received changes to their AV and close attention should be paid to the changes in value as well as insuring that the appropriate phase-in and exemptions are applied.
  • As the TPP phase-in continues in 2021/22, residential tax rates should decline. Given the many changes to the assessment roll, the magnitude of the reduction is uncertain.

Nassau County Class 4 Commercial Property – Disputed Assessment Fund (“DAF”) Program Continues with 2021/22 bills.

All Class 4 commercial properties fund potential property tax refunds by contributing to the DAF.  The program was redefined with the charge shown as a levy (an additional general tax line item) that can be used for tax refunds on any Nassau County commercial property.  2020/21 commercial general tax bills included a DAF charge of $24.363 for every $100 of AV, a drop of 10% from the prior tax year.

You Can Still Switch From a Non-Rising Star

If your income is greater than $250,000 and less than or equal to $500,000 and you currently receive the Basic STAR exemption, you now automatically receive a check for the STAR credit instead of a reduction on your school tax bill.  No need to switch.

If your income is $250,000 or less and you currently receive the STAR exemption, you can choose to register for the STAR credit to receive a check instead; you may receive a greater benefit, and your savings will never be less than the STAR exemption benefit.  The value of the STAR credit savings may increase by as much as 2% each year, but the value of the STAR exemption savings cannot increase.  For most, it is time to switch to the STAR credit and catch a rising STAR.  One word of caution, if your bank is paying your taxes via a mortgage escrow, the initial switch will create an escrow deficit.  Your tax bills will rise by the amount of the STAR but you will receive a check from New York State for that amount.

To switch to the STAR credit, go to https://www.tax.ny.gov/pit/property/star/default.htm

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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