How New York City Renters Are Getting Screwed By Taxes | Bedford Hills Real Estate

 

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[Via Business Insider.]

Josh Barro took property tax data from the Lincoln Institute of Land Policy and broke it down for Business Insider, showing just how high the taxes levied on New York City rental buildings are, especially compared with other high-rent cities. And though we don’t know exactly how much of that is passed on the renters themselves, general wisdom is that it’s a lot. Now for some fun facts: Of the 50 largest cities in the U.S., only Detroit has a has a higher tax rate on apartment buildings. And just think about how much more New York real estate costs—but then, when you compare New York solely to other high-rent cities (where median rents exceeded $1,000 in 2011), New York still comes out on top in the tax department. This is not a contest we want to win.

Check out this other graph, which shows that owner-occupied homes and small apartment buildings are taxed at much lower rates than walk-up rentals and apartment buildings with elevators. “Our tax rates on owner-occupied homes are actually some of the lowest among large cities. But who can afford to buy here?” Barro asks.

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[Via Business Insider.]

So we know that rental buildings get taxed more than rental buildings in other cities and 6.4 times owner-occupied homes, but how much is really passed on to renters? In Boston, a study showed that landlords take care of 85 percent of the burden, but in New York it’s likely that more of the cost is shouldered by tenants paying inflated rents, mostly because apartment supply here is more limited and there needs to be some kind of incentive for landlords not to convert their buildings to co-ops or condos.

“Rent control does shield many New York renters from the burden of property tax increases. But that doesn’t help market-rate tenants like me. And tax abatements for new rental buildings are tied to requirements to set aside affordable units; again, the benefit of the abatement does not flow through to tenants paying market rate,” Barro concludes. “Living in New York is crazy expensive. Partly, that’s for reasons outside the control of policymakers. But one reason is this hidden tax on renters that New York has decided, uniquely among large cities, to impose. It’s a big mistake.”

How New York City Renters Are Getting Screwed By Taxes – The Rent Is Too Damn High – Curbed NY.

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