Schroder & Strom, LLP | Real Estate Tax Counsel

(516) 742-7430

Reclassification

 
Reclassification of Mixed Use Parcels

Our firm is acutely aware of the difference in tax burden between commercially and residentially classified property. Commercial property owners pay significantly more in real estate taxes than owners of residential properties of equal value. After we are retained to challenge the assessment of a mixed use parcel, the first step we take as routine is to explore the possibility of changing the classification from a commercial class to a residential class, if we can prove that the property is primarily residential in use. (A re-classification from a commercial to residential class can result in significant savings to our clients, as much as 60% of annual tax bills.) One such notable case involved a dentist’s office located in a single family home in Syosset. The County agreed to reduce the tax class from commercial to residential use after listening to our presentation and physically inspecting the house, but refused to grant the change of class retroactively. During the litigation, the County agreed to retroactively change the class, but only if the owners would allow the County to increase the value of the house years after it had already been assessed. Naturally, a retroactive increase in market value would have greatly diminished the amount of the tax refund our clients would have been entitled to as a result of the change in class. In Feryo v. Nassau County, the Court held that our legal argument, which would prevent the County from retroactively increasing the value of the property, was correct. The court approved the reduction in assessment and the full tax refund that we sought. The County has filed an appeal of this decision.