You may put off thinking about your income taxes until April but NOW is the time to pay attention to your property taxes.
Did you know that your annual property taxes are based on the assessed value of your property as of the first week of January each year? But how does the city determine your property’s value? And what can you do if you think the city gets it wrong?
The city’s Department of Finance (DOF) uses a lot of different information to determine your property’s market value. For 1, 2 and 3 family homes, this includes comparable local and information about your property, such as square footage and any reported rental income. Once DOF has arrived at a market value, it uses that number as the basis to calculate an assessed/taxable value. Your annual property taxes will be a percentage of this assessed/taxable value, reduced by the effect of local laws that limit how much your property taxes can increase from year to year.
Each January, the city crunches these numbers, and then mails every property owner a “Notice of Property Value.” This notice details 1) the Department of Finance’s understanding of your property’s market value; 2) their calculation of your property’s assessed/taxable value and 3) any property tax exemptions you are receiving (for example, because of disability, clergy status, etc.).
Don’t ignore this mailing! You have only a limited time to challenge the city’s assessment. If you fail to do so, in June, your annual property tax bill will be generated on the basis of the information in this notice.
There’s no doubt that despite its best efforts, the city sometimes gets it wrong. Just today, I am co-chairing a city council hearing focused on the assessments of Zone A properties damaged by Hurricane Sandy. Some of these property owners recently received Notices of Property Value that indicated their homes’ values had INCREASED, despite being flooded or otherwise damaged and uninhabitable. Rest assured, we will do everything possible to ensure that these errors are corrected and these owners are treated fairly by the city.
The 36th District was mercifully spared most direct effects of the storm, so problems with your Notice of Property Value may be less glaring. Nevertheless, they can affect your bottom line for years to come. Don’t sleep on your rights!
To challenge the city’s determination of your assessed value, you must file an appeal with the Tax Commission, available here: (Tax Commission Appeal Forms). Owners of 1, 2 and 3 family homes have until March 15th to submit their appeal using Form TC600. If you do not file your appeal by the deadline, you lose your right to contest your property tax bill for the next year!
To inform the city that your property suffered Sandy related damage that has affected its value, complete the online form, available here: (DOF Sandy Damage Report). The deadline for submission was recently extended to March 15th but you should submit it as soon as possible.
If you wish to dispute the Department of Finance’s description of your property, you must complete Department of Finance request form, available here: (DOF Request Forms).
For all of these appeals, be prepared to provide documentation to support your challenge. For example, a contractor’s estimate of the cost of needed major repairs may help demonstrate that your property is worth less than the city believes.
You may also apply for property tax exemptions using the form here: (Exemption Application). This form is due by March 15.
I understand that this information is complicated and the rules and deadlines differ for other property types, including co-ops, condominiums and commercial buildings. The Department of Finance has prepared new Property Tax Guides, available here: (Property Tax Guides) that explain these matters simply and in detail. Of course, my office is available to assist constituents with these and other matters of importance to you.
Giving the proper attention to the city’s assessment of your property taxes today can save you money and headaches down the line while keeping our community healthy and stable.