Property Tax Rates Lowered In 2007

Originally published June 2007

On June 15th, New York City issued property tax rates said to be effective for the entire 2007/08 tax year. This "early" issuance of tax rates reverses a longstanding practice, started by the City in 1995, of billing the July 1st installment at the prior year's rate and then issuing a "final" tax rate late in the year. The use of estimated rates for July 1st billing necessitated the issuance of yet a third rate for the billing of the January 1st installment, and caused excessive work for taxpayers, especially the owners and operators of commercial properties needing to bill tax escalations through to tenants. Coincidentally, it generated extra problems for the City as well, not just in the billing phase, but also in the proper posting of payments and calculation of tax refunds.

The 2007/08 rates, as compared to 2006/07, are as follows:

Historically, the Class 2 rate is now the lowest it has been since 2003/04, and Class 4 is at its lowest since 2002/03. During these same periods, however, both Tax Classes have seen significant increases in assessed values.

Online Payment of Taxes

Electronic payment of taxes is mandatory for any single property whose annual tax liability is $300,000 or more, or where a single payment covering multiple properties is $300,000 or more.

Procedures for the payment of taxes by electronic funds transfer (EFT) vary depending upon whether taxpayers make their own payments, which include FedWire, or whether tax payers have authorized the City to debit bank accounts in payment of taxes. Please note that there are very specific rules as to what constitutes "timely" payment when New York City real estate taxes are being paid by EFT.

The date set by law for payment of the first installment of real estate taxes is July 1st. Since July 1st falls on a Sunday in 2007, payments would ordinarily be due on July 2nd. Recently, however, the Department of Finance has posted Statements of Account indicating that the due date of the first semi-annual or quarterly installment for tax year 2007/08 will be July 6, 2007.

The Department of Finance EFT website may be accessed at: www.nyc.gov/html/dof/html/property/property_bill_eft.shtml.

ICIP Tax Exemption

The Industrial and Commercial Incentive Program (ICIP) has historically provided real estate tax exemption benefits for the construction, renovation or alteration of qualifying commercial properties in eligible areas of the City. The New York State law...