"Tax reform" with a twist
/A bipartisan group of city lawmakers is pushing Albany to approve tweaks to the state tax laws that would allow them to hit new homebuyers with tax bills based on the actual market prices of their properties.
The coalition of 13 Republican and Democratic city council members says that taxes would not go up for existing owners.
New York’s famously opaque property tax system offers big breaks to new homebuyers by taxing them at assessed values that are often millions of dollars less than the market price.
For instance, a buyer who snapped up a Clinton Hill brownstone for $3 million in 2017 only has to pay taxes on a sliver of that amount — $24,000, leaving the lucky owner with a tax bill of just $4,297 a year.
Meanwhile, the owner of a relatively modest half-million-dollar Bergen Beach bungalow pays nearly an identical amount, despite being worth just one-sixth the price on the market.
The current system amounts to a giant giveaway for gentrifiers, Staten Island Councilman Joe Borelli told The Post.
“People are just getting fed up with the loophole, and they’re demanding action,” the GOP politician added.
The bipartisan coalition also includes Park Slope Democrat Brad Lander and Bay Ridge Democrat Justin Brannan.
They’re backing a resolution that calls on state lawmakers to change the tax law to require new homebuyers to pay property taxes on the market rate instead of the heavily discounted assessed value.
The change would boost the Clinton Hill gentrifiers bill by $1,600 a year while keeping the Bergen Beach old timer’s costs the same.
The way these things usually work, in places other than NYC, is that property tax revenue is treated as a fixed-size pie; if one group of property owners’ slice is increased, others should see their slice diminished, and there is no change in total revenues collected. Not so under this plan, which aims to increase the size of the pie: rich homeowners will pay more, the hoi polloi’s tax burden will remain unchanged.
It’s a clever dodge, because that Brighton Beach taxpayer, smarting at the injustice of the current system will see that his rich neighbor is being screwed, finally, and his schadenfreude will blind him to the fact that, once again, the politicians have just found a new way to increase spending. The more money available to spend, the more to devote to corruption and graft. So essentially, nothing will change.