The ‘winners and losers’ of NYC’s proposed property tax plan

City officials are proposing a massive overhaul of the property tax system that would result in changes for 90% of homeowners — with people like Mayor Bill de Blasio, who owns properties in Brooklyn’s brownstone-laden Park Slope, facing significant increases while many in the Bronx, Queens and Staten Island would enjoy tax cuts.

“There are going to be winners and losers,” said Marc Shaw, chair of a commission that released the preliminary report on property tax reform Thursday after nearly two years of deliberations.

The Advisory Commission on Property Tax Reform that was created following a still-pending lawsuit by plaintiffs who claim the current system is unfair — as the owner of a $9 million Carrol Gardens, Brooklyn building pays the same $4,300 in annual taxes as the owner of a $500,000 Elmhurst, Queens, split-level home.

The overhaul requires state legislative approval that could take another several years. The famously opaque property tax system was last reviewed by a government commission in 1993. Changes would be phased in over five years with annual increases capped at 20%.

There’d also be tax breaks for low-income New Yorkers and residents as opposed to owners who don’t live in the city full time.

The thrust of the reforms would treat all residential properties — from single-family homes to co-ops, condos and small rental buildings — the same for tax purposes to bring “simplicity and fairness to the system,” according to Shaw.

Right now they’re taxed at different rates.

Bronx Assemblyman Jeffrey Dinowitz said he was pleased that co-ops and condos would be treated the same as one- and two-family for tax purposes.

“That’s something we have long advocated for. Condos and co-ops are assessed at a higher rate,” Dinowitz said.

The properties would also be taxed at their full-market values instead of the current system, which calculates payments using a complicated value including the assessed and market values.

The changes mean that New Yorkers like de Blasio, who pays just $4,000 a year for each of his Park Slope homes because he brought them years ago before neighborhood prices skyrocketed, will owe “significantly” more in taxes, Shaw said.

One percenters will also be hit by the changes. For example the buyer of a $100 million penthouse at One57 who paid about $500,000 in property taxes last year, would be on the hook for $2.5 million under the proposed reforms, Shaw said.

Owners of co-ops and condos in the Bronx would see their tax bills slashed, he said.

Sen. Andrew Gounardes (D-Brooklyn) welcomed the report but cautioned key issues still have to be addressed.

“While in principle some of the Property Tax Commission’s ideas will address the long-standing inequities of the current system, including two ideas I’ve already proposed through legislation, a circuit breaker and lifting of assessment caps, critical questions still remain: what are the proposed rates? What are the thresholds for the homestead credit? What controls are in place to prevent another decade of runaway budget growth? What is the timeline for a final report?,'” Gounardes asked.,

“I applaud the commission for its work – but it’s not done yet. The commission should brief the legislature on its recommendations and give us a roadmap with specific details so we can finally take action after 40+ years of inaction,” he said.

Martha Stark, Policy Director for Tax Equity Now New York said the commission’s report and recommendations “expressly recognize that the current system is unfair, opaque, and arbitrary.”

“As such, the commission’s conclusions vindicate many of the criticisms that led us to bring suit 3 years ago,” Stark said in a statement.

“But talk isn’t enough. Commissions have come and gone in the past with no action. And the commission’s recognition that the current system is deeply flawed makes even more critical that New York’s courts should rule on TENNY’s claims, and thereby provide crucial guidance on what the law requires – guidance critical to achieving the reform the report makes clear is essential to achieving a property tax system that is transparent and just.”