Taxes are an inescapable fact of life. If you’re a property owner in New York, property taxes form a big part of your tax liability. Property tax is paid on property owned by individuals or other legal entity and varies from one state to the other. This tax liability depends on the market value of your property.
The basis of property tax is the property value, which the authorities get from the property tax assessment. It’s important to understand the details of the property tax assessment process because it directly affects your tax bill. New York has the highest tax rates as residents spend almost 13.8% of their annual income on state and local taxes.
It’s important to remember that failure to pay property taxes, penalties, and accrued interest could lead to loss of your property. For these reasons, it’s important to learn more about all factors affecting your tax deductions and the tax grievance process.
This post examines property tax assessments, their effect on your property tax liability, and how to handle the process.
How is Your Property Tax Calculated?
Property tax is primarily based on the property’s value. The property value varies from year to year and is determined on a specific date of the year. The intervals of value assessment vary in different jurisdictions. While in some areas the assessment is done annually, in others the process is done during property transfers.
In New York, property tax is determined using the assessed value. To calculate the annual property tax in New York, you multiply the taxable value of your property by the tax rate (mill rate) for the property’s tax class. The rate changes every year. For example, in NYC, the average effective property tax rate is 0.88% but rises to 1.69% statewide.
The authorities can carry out a property assessment in three ways:
The replacement method/ cost method
The sales comparison method/ the market approach method
The income method for business properties
Exemptions are subtracted from the assessed value to give the taxable value. The tax authorities apply the tax rate to the taxable value to show what you owe in taxes. New York State residents’ exemptions include the State School Tax Relief Program, or STAR, and the homestead property exemption to lower the amount of their home’s value they are taxed on.
When determining property tax, New York state authorities consider public goods and services. Public goods include facilities like public schools, and parks, sewer lines, and roads. Public services include police services, fire services, garbage pickup and recycling.
Each of these public expenditures form a component of the applicable tax rate. Due to such calculations, there are cases where the assessed value of a property can differ from the actual value of the property in the market.
If you feel the property assessment is not right or seems too high, you have a right to appeal the assessment. To do this successfully, you need the professional services of a tax expert.
What Makes Your Property Tax High or Low?
The biggest factor in determining property tax is the assessed value of your property. The other crucial factor in your property tax bills is the use of the property. For instance, are you using the property for residential, commercial, rental, agricultural, or is it vacant land? Some properties such as churches and charity offices might be exempt from taxes.
The tax multiplier is applied uniformly for property in the same category but differs from one category to the other. While the tax multiplier is uniform in the same category, there are other factors that affect the final tax figure. These include location, size, age, and architecture. Your property tax bill changes from year to year depending on fluctuations in perceived market value.
Tax professionals help in the following ways to ensure a favorable property tax assessment:
Tax rates/market values: Your tax advisor ensures that you understand the tax rate and the market value that the assessor is using to calculate your tax assessment. If one of these factors is wrong, you are free to appeal.
Analyze the assessment for errors: A tax expert ensures the information on your property card is correct. They check government records relating to your property- location, size, dimensions, use, etc. These professionals ensure your information is up to date and point out any discrepancies that impact your assessment negatively.
Review comparable properties: If you file a tax grievance, your tax advisor helps review data pertaining to the comparable properties used in the assessment.
Consultancy: A property tax expert offers advice in reducing your tax burden. For instance, they advise you to avoid building before an assessment. Home improvement projects like a pool or a garden shed improve the value of your home, and hence a higher tax assessment may be levied. Avoid building permanent structures before an assessment. They also advise regarding your home’s curb appeal, which is highly subjective.
Advice on your role: The tax expert might advise you to act as a “tour guide” for the assessor to ensure they see the whole picture to avoid bias.
If you have an issue with the assessed value of your property in New York, you can file a tax grievance. The best approach is to use a tax grievance company, which will have the expertise and resources to help you achieve positive results.
Heller & Consultants is a tax grievance firm with decades of experience across Nassau or Suffolk counties, New York. We have worked with thousands of aggrieved property owners over the years to get favorable property tax assessments.
Contact our team today for dedicated advice on your property assessment in Nassau and Suffolk counties, New York.
When we compare the average property tax of different states across the USA, the State of New York stands out among the top tier of those who pay the most in property taxes. Among the many different counties of New York, Suffolk and Nassau counties on Long Island have some of the highest property tax rates (both over 2%). Why is it that Long Island has some of the highest property tax rates in one of the highest states for property taxes in the USA? The answer is a little complicated. To help you understand, we have broken down the major factors that contribute to this below.
Property Values Are Higher
The median price of homes in Long Island is about $500,000. In comparison, the median price of homes across the USA is about $250,000. This means that property values in Long Island are more than twice the national average. For this reason, those who live here will naturally have higher property assessment rates. Remember that Long Islanders also have higher average property tax rates than most of New York State and the United States.
High Property Taxes for Public Education
More than 60% of the property taxes collected by Long Island are distributed among the 125 public school districts across Long Island. Sadly, these taxes are disproportionately distributed to rich neighborhoods and for paying exorbitant salaries for administrative officials for these school districts.
Unique Assessment Formulas
Long Island has a unique formula for property tax assessment that is difficult for the average homeowner to understand. Handling Long Island property tax grievances, for example, is often out of the expertise and/or knowledge of most homeowners. In addition, the formulas often work against middle-class homeowners since they don’t account for the growing costs of living in Long Island.
Public Employees (Current & Former) Receive a Lot
One of the beautiful things about taxes is that we can all pitch in and pay a fair share to finance public services that we almost all use and take advantage of such as public education, fire services, sewage, and police services. However, we might need to reconsider how much we pay public employees. There are various school superintendents and police officers across Long Island comfortably making more than 6 figures each year from property taxes paid by Long Island property owners.
Unnecessary Expenses in Public Services
Given the high amount that we pay for public services, it is fair to argue that we are perhaps paying too much. Accordingly, various public services are being overfunded. There are even instances where Suffolk County has had to borrow money, such as $60 million in 2016 to pay pensions for retired police. It has been reported, for example, that over 235 retired police officers are receiving 6 figure pensions.
Need Some Help Lowering Your Annual Property Taxes?
If you live on Long Island and are currently paying high rates for property taxes, we understand your struggle and concerns. Here at Heller & Consultants Tax Grievance, we have an extraordinary record in helping you minimize your property tax burden. Best of all, you won’t pay us a dime until we successfully lower your property taxes. Give us a call for a free consultation today or apply online here.
Grieving your property taxes can be a long and difficult process without a knowledgeable and experienced third party like Heller & Consultants to handle it for you.
If there’s one thing that people like, it’s the ability to save a buck or two, and when it comes to their home – and the taxes they pay on it – the more money you can save, the better.
Many Long Islanders are familiar with the concept of grieving their property taxes with the county or town that they live in to potentially lower their bills. However, this can be a long and difficult process, and one in which people often recruit knowledgeable third parties to handle for them.
And when it comes to saving Long Islanders every cent of money that they possibly can on their property taxes, no other firm has the proven track record and enormous reductions that Heller & Consultants Tax Grievance has garnered over the years.
Based out of Rocky Point with satellite offices in Deer Park and Farmingdale, Heller & Consultants first opened their doors for business in 2007, and service clients in both Nassau and Suffolk County. Owner Adam Heller was kind enough to lay out the basic process behind why people grieve their taxes, and what his company can do to help them in that endeavor.
“Your tax bill is based on what your municipality believes the property to be worth…the more they think your property is worth, the higher your property tax bill, and the lower they think it’s worth, the lower your property tax bill,” he said. “What we do is that we prove to the assessor that it’s worth less than what they say it is, reducing the homeowner’s property taxes.”
Grieving your property taxes is literally a no-lose situation for any homeowner. First of all, Heller & Consultants charges the client nothing upfront, and nothing at all unless they actually reduce their taxes, in which case they typically charge one-half of the first year’s savings. There will also be no unwanted visits from a Heller representative or from any Suffolk or Nassau officials, and homeowners are protected under NYS law so that their taxes cannot be raised due to filing a grievance.
Also, if the idea of successfully grieving your property taxes has some homeowners worried that this can actually reduce the market/selling price of their home, nothing could be further from the truth. In reality, it actually increases the value of their home instead! MLS studies show that homes with lower property taxes than surrounding homes sell for 10-20 percent more than surrounding homes; therefore, lowering your property tax assessment actually increases your home’s market value.
When it comes to the success that Heller & Consultants brings to the table in terms of saving their clients money, nothing speaks louder than the fact that they are literally a record-breaking agency in that regard, Heller said.
“Our firm holds the highest-ever one-year residential property tax decrease in both Nassau and Suffolk County,” he said. “In Nassau County, the record is $73,443, and in Suffolk County it’s $29,185.”
It’s no accident that Heller & Consultants can achieve those lofty numbers when it comes to saving their clients money on their property taxes; Heller notes that they put their all into each and every case they handle, whereas many of their competitors will only do so for their high-profile clients.
“We spend more time preparing the cases, and we put more work into it than other firms do. We try just as hard to get a homeowner a $1,000 reduction a year or a $70,000 reduction a year,” he said. “Many firms will prioritize their cases by the most profitable ones, and we really pride ourselves at looking at each case individually and putting everyone under a microscope and preparing the best evidence we can in court. After all, the burden of proof is on us to prove the assessor is wrong.”
Heller & Consultants will grieve property taxes for both residential and commercial clients.
Due to the ongoing COVID-19 pandemic, Heller said that 2020 is shaping up to be one of his firm’s busiest ever, simply by the fact that people are doing whatever they can to save an extra buck due to the financial hardship so many are facing.
In addition to the pandemic, Nassau County’s recent overhaul of their assessment system is also causing more than a few headaches for people this year, Heller said; the assessed values of every property in Nassau have been all essentially reset, so even if a person has grieved in the past, they are starting from scratch in 2020.
“Nassau has started reassessing on an annual basis, so it’s vitally important for Nassau residents to start grieving their taxes every year,” he said. “In contrast, in Suffolk County you can only win a tax grievance case every other year. If you win one year, you can’t win again the following year.”
When it comes to helping people navigate the complicated legal system – and saving them some of their hard-earned money in the process, including not taking a fee unless they are successful – Heller said that the hard work is all worth every second that he and his dedicated consultants put into it.
“I used to be a real estate broker, and during a downturn in the market I sold the business and moved into grieving property taxes, which is very similar in that we are valuing real estate and still helping people,” he said. “Unlike many firms, we update the client monthly because it does typically take 12-18 months to get a result, whereas other firms will just disappear until a verdict is reached. We are always honest and always go the extra mile for our clients.”
Looking to appeal your property tax assessment in the near future? We are here to help. Here at Heller & Consultants Tax Grievance Group, we have developed a system to help our clients save money on taxes. Best of all, you don’t have to pay a dime until we win your case. Below, we will break down 15 expert tips for getting your property tax assessment appealed successfully.
1. Know How Your Municipality’s Assessment Works
The assessor that works for the municipality does not have your best interest at heart when they are assessing the total value of your home. In all reality, they are only motivated by getting their job done as quickly as possible. Even if this means that they cut some corners and miss out on some important details in the assessment process. Of course, this can be very problematic for you as the property owner seeking the lowest property taxes possible.
2. Determine Deadlines for Grievance
Better known as “Grievance Day” you will need to have all of your grievance paperwork formally filed and turned in by this day to have a chance at getting your petition approved. Be sure to check your local municipality’s website to determine what day of the year your local Grievance Day is. Keep in mind that if you wait too long that you cannot appeal your tax assessment until the next calendar year.
3. Compare Local Properties
One of the best ways to gather evidence that your property assessment was inaccurately done by the municipality is to look at some of the similar homes you have in your area. To be clear, it’s important to compare similar properties in many different areas such as the total number of rooms, the size of the property, remodeling work that has been done, amenities, and so on. If you find similar homes in your locality with lower values and you may already have a case.
4. Do a Private Appraisal
If you have the extra money to spend on a private appraisal service, this will probably be enough evidence for you to get started with your petition. In many cases, a private appraisal will be a lot more thorough since you are privately paying them to do a good job. One of the only downsides to this idea is that you might end up spending more money than you could end up saving that year on your taxes. Especially if you don’t get your appeal approved.
5. Consider the Recent Purchase Price
Did you recently purchase the home, or have data from previous purchases? This is generally really good evidence that you have a case to appeal your home’s value assessment. The main idea here is that you need to demonstrate that the property was purchased without the seller being under duress. If the seller can be proven to have been under duress, your evidence here will hold a lot less ground.
6. Look at Online Value Estimates
There are various online property value estimators. Zillow is one of the various options that you can use for getting an online value estimate. Although sources like these can definitely help you to appeal your home’s value assessment, these are usually best paired with other forms of evidence. In other words, don’t use online value estimates as your only piece of evidence if you want to have the best chance possible for winning your case.
7. Compile Data the Assessor May Not Have Had
There are literally hundreds of variables that can come into play when properly determining your property’s value. From small details such as the total number of rooms and the overall property size to smaller details such as recent home renovations, try to find data that the municipality assessor either skipped, missed, or didn’t even have access to. These are a great starting point for helping you get your petition approved.
8. Check for Errors in the Municipality Assessment
You wouldn’t be trying to appeal your property value assessment if you weren’t convinced that there was at least one error that will eventually force you to pay higher property tax levels. Therefore, compile each of the errors that you notice and formally list them. This way, you can easily reference this information later on when it comes time to formally appeal your property value assessment with your local municipality.
9. Have a Logical Case for Your Grievance
You shouldn’t depend on your ability to fool people into giving you an appeal for your property tax assessment. This is a recipe for complete disaster. Municipality officials are generally very smart and will pay closer attention to details during a tax grievance petition process. This is why you need to focus mostly on developing a logical case for your grievance that is based on facts and errors committed by the municipality assessor instead.
10. Remember that This is a Common Thing to Do
Many people, for whatever reason, start to feel bad about appealing their property tax assessment. They might see this as potentially unethical, morally wrong, and so on. In reality, doing this is a completely common and 100% legal thing to do. Therefore, you are simply upholding your rights as an American citizen and protecting yourself from potentially paying more than your fair share of property taxes.
11. Remember that You Are Challenging the Assessment, Not the Taxes
Clearly, your end goal of getting a property value assessment appealed is so that you can lessen the burden of property taxes. However, it’s important to keep in mind that you are not ever going to actually challenge your total amount of property taxes. Instead, what you will be challenging is the assessment made by the municipality’s assessor. This is the data that you will need to be appealed if you hope to lower your property taxes.
12. Know Your Municipality’s Appeal Requirements
Typically, you will simply need to fill out a couple of forms and formally submit a letter of petition in order to kick-start the process for getting your appeal handled. However, this process can be different depending on which municipality you live in. Be sure to check with your local authorities to ensure that you know all the requirements for properly getting your appeal put into the system.
13. Complete Your Paperwork Properly
As you probably know, handling government paperwork can be a bit of a hassle. There can be lots of picky information that you need to include, details that you need to look up, and so on. However, it is important that you give this process the respect it deserves. Make sure you input all the correct information that you gathered during your research stage in order to
14. Formally Petition Your Property Assessment
Once you have all of your facts straight, the paperwork completed, and know the process for doing your petition, all you need to do now is go through the steps. Clearly, this is a process that you can do on your own. Once you formally submit your petition, simply wait for Grievance Day to pass. If successful, your adjusted value will be posted on your municipality’s Assessment Roll promptly.
15. Get Professional Assistance for Property Tax Grievance
Here at Heller & Consultants Tax Grievance Group, we specialize in helping our clients get their property assessment petitions approved in a timely and affordable manner in the Long Island area. We are so confident in our service that you won’t need to pay anything until your property tax grievance is approved. Give us a call today for a free consultation.
Property taxes fund schools, libraries, police and fire departments, along with public works such as roads, parks, and playgrounds. They’re essential to our communities – but that doesn’t make them any easier to pay. When you buy a home, you learn what the property taxes are in your area. However, when those rates start rising, it’s often difficult to understand why. When you’re holding a higher tax bill in your hand, it’s most likely one of the following reasons that are to blame for your property tax bill rise.
1- Property Revaluation
Predictably, municipalities do reevaluate the properties in their area at certain intervals. During this time, accessors, who are government officials, will go around and do their best to determine the true assessed value of the properties in their jurisdiction. This is to help ensure that the tax burden is correctly spread amongst the area’s homeowners. The assessor is only responsible for assessments – not taxes.
According to the NY State Department of Taxation and Finance, months after assessments are finalized by the assessor, taxing units (school districts, cities, towns, and counties) determine the amount of taxes that a taxing unit needs to collect from property owners, known as the tax levy. The property tax levy is determined separately from the assessments and is then distributed over all taxable assessments.
A home assessment doesn’t necessarily mean that your taxes will go up. For example, there may be a lot of new constructions in your community, which can help to offset any tax bill increase.
2- Home Improvement and Additions
Renovations are a common part of homeownership and revitalizing your home can add to its value. Unfortunately, however, that bathroom or more substantial kitchen renovation you just finished will most likely cause your property taxes to rise as well. Why? There’s a simple reason. Improving your home means it’s worth more. As your property taxes are based on the value of your home, when your home value increases, your property taxes will increase alongside.
Adding a second floor to a ranch home or an extension to the back of a colonial house will most likely increase that home’s property taxes. But anything that increases the square footage of the living space that you already have, such as finishing the attic, garage, or basement with sheetrock and adding heat and air conditioning, will likely trigger an automatic reassessment as well.
Building an additional bathroom is an improvement that will trigger a reassessment of a home. While replacing cabinets in your kitchen may not trigger an assessment, moving walls and adding cabinets and countertops may.
Even improvements to your property outside of your home can trigger an assessment. While above ground pools don’t tend to increase property values, inground pools do. Adding fences, sheds, patios, and decks can also increase your home value, causing corresponding property taxes to increase.
Before any home renovation, it might be worth running the numbers. Calculate how much the renovation will cost you, what it will add to your property’s value, and then figure out what the probable rise in your tax bill will be. Before you pull the trigger on your home renovation, decide if you can afford a higher property tax bill, or if the expense of the remodel will leave you with too short a cash flow to pay the higher rates. If you’re unsure, you might want to hold off and save up until you’re sure you have enough for a renovation and your new property taxes.
Home values are partially based on the value of other homes in the area – so keep track of what your neighbors are selling their homes for, not what they pay in taxes since what they pay can include exemptions. If the homes in your neighborhood are selling for more than the asking price, it might be a sign that property taxes are soon to rise. Unfortunately, this type of tax increase is out of your hands.
4 – Building New Schools
New schools are important additions to the community – however, they’re also almost always a signal that a property tax hike is on the way. First off, new schools will attract new families as your community becomes a more desirable location. This will drive home prices up, and subsequently, property taxes.
New schools – at least, if they’re public – may also contribute to higher government budgets, as administrators, teachers, and school employees will need to be hired, and grounds will need to be maintained, which almost always indicates that a tax rise is on the way.
5 – Local Government Budget Increases
One of the principal reserves on which cities and counties draw to fund their budgets is the property tax. If budgetary needs increase, the residents’ taxes may need to be increased to help pay for it.
According to the Office of the NY State Comptroller, with some exceptions, the State’s Property Tax Cap limits the amount local governments, and most school districts can increase property taxes to the lower of two percent or the rate of inflation.In order to override the Tax Cap, local government boards must pass a local law or resolution by at least a 60 percent vote.
What should I do if I Think my Long Island Property Taxes are Too High?
So how can homeowners push back and lower their property tax rates? For starters, make sure your property records reflect your property accurately. Mistakes do happen. Some assessments list more bedrooms or bathrooms than you have in your home. If you do find mistakes, make sure to contact the tax assessor and have them corrected.
If you believe your property taxes are too high, you can file a tax grievance. A tax grievance professional can give you a good estimation of whether pursuing a tax grievance is a good idea or not, and that’s because they have a great sense of the tendencies in the local boards when evaluating various kinds of petitions. Hiring a respected tax grievance firm costs you nothing unless your property taxes are reduced.
Founded on the simple principle of helping our clients pay the lowest possible property taxes, Heller & Consultants Tax Grievance have saved Suffolk and Nassau residents over $35 MILLION, a figure that continues to increase daily. Last year alone we saved our Nassau clients over $1.5M in property taxes… Suffolk homeowners over $1.4M.
Curious How the Property Tax Deduction Works? Here’s a Guide to Help You Out.
The property tax deduction is one of many benefits of being a homeowner, although surprisingly, you don’t even need to own a home qualify for this tax break. Read on to find out more about the property tax deduction and how you can claim it on your tax return.
Property tax deductions are available for property and real estate taxes you pay on your:
Property outside the United States
Cars, RVs and other vehicles
In 2018, the IRS announced a new limit on property tax deductions, allowing for of up to $10,000 ($5,000 if married filing separately) to be deducted on a combination of property taxes and either state and local income taxes, or sales taxes.
What’s not deductible
The IRS doesn’t allow property tax deductions for:
Property taxes on property you don’t own
Property taxes you haven’t paid yet
Assessments for building streets, sidewalks, or water and sewer systems in your neighborhood. (Assessments or taxes for maintenance or repair of those things are deductible, though.)
The portion of your tax bill that’s actually for services — water or trash, for example
Transfer taxes on the sale of a house
Homeowners association assessments
Payments on loans that finance energy-saving home improvements. (The interest portion of your payment might be deductible as home mortgage interest, however.)
More than $10,000 ($5,000 if married filing separately) for a combination of property taxes and either state and local income taxes or sales taxes.
How to take the property tax deduction
Start by finding your tax records – your local taxing authority should be able to give you a copy of the tax bill for your home. Meanwhile, scrutinize the registration paperwork on your car, RV, boat or other movable assets, as might be paying property taxes on those as well.
Exclude any taxes that the IRS won’t count. For example, you can deduct a property tax only if it’s assessed at a similar rate as other like properties in the community. The proceeds have to help the community, not pay for a special privilege or service for you.
Use Schedule A when you file your return – that’s where you’ll figure your deduction. Note: This means you’ll need to itemize your taxes instead of taking the standard deduction. It’ll probably take more time to do your taxes if you itemize, but you will likely leave you with a lower tax bill.
Deduct your property taxes in the year you pay them. Sounds simple, but it can be tricky, as there are two ways people typically pay property taxes on a house. Either you’ll write a check once or twice a year when the bill comes – simple and straightforward; or, you may set aside money each month in an escrow account when they pay the mortgage. If you’re paying your property taxes using the second method, you’ll need to stay organized, so you’re only deducting the actual tax paid that year, not all the money in escrow.
If you bought or sold your house this year: If you owned a taxable property for part of the year before selling it, you can usually deduct the taxes attributable to the time you owned the property. So, if you sold your house in July, you would deduct the first half of the year’s property taxes on the house, and the buyer would deduct the second half.
Renters: Renters might qualify for a property tax deduction on their state taxes.
How to get a bigger property tax deduction
Prepay your property taxes. If your semiannual tax bill is due next April but you pay it early — say, this December — you can deduct it this year instead of next year.
Save your registration statements. When it’s time to renew your registration on a vehicle, check if any part of the fee is actually property tax. There could be a tax deduction hiding in there.
Scrutinize your closing paperwork. If you bought or sold a house, go back and look at what you paid at closing for property taxes. After the tax assessor has a chance to revalue the property, you might get a second tax bill.