Nassau County Revaluation Update: Can a phase-in of assessments work in Nassau County?
The real estate tax Law Firm of Schroder & Strom weighs in on tremendous risk to the financial stability of Nassau property owners.
Nassau County, NY homeowners have received revaluation notices from David Moog, the County Assessor, advising that the value of their homes have increased (since 2011) and providing the County’s estimate of current value. Official notice that a home’s value has increased is usually good news, but here the Assessor will be using the new value to levy higher taxes by 2020. Values have increased by 50% to 100% or more, depending on where the home is located. Homeowners are calling our law firm in disbelief, alarmed at an increase in the cost of home ownership. Such fears anticipate drops in market value due to higher taxes and the loss of the Federal tax deduction for real estate tax payments.
Curran proposes plan unlikely to work in Nassau County.
County Executive Curran has assured homeowners that she is working on a plan to phase-in assessment increases over five years, based on a program in effect in the Westchester Town of Greenburgh. The Greenburgh plan has plenty of exceptions and is highly selective in determining which assessments will be phased-in. It is doubtful the same program can work in Nassau County.
The first eligibility requirement for Greenburgh’s phase-in program is that the assessment (not the value) must be higher than the previous year. Assessments in Nassau are actually going down, while values are going up. How can that be?
While current law (in effect for over 25 years) caps any assessment increase by 6% per year, – thereby providing protection from “tax shock” homeowners are now experiencing – the Curran administration has found an apparent loophole.
Curran’s loophole changes the Level Of Assessment (“LOA”) for the revaluation from its current level of .25% of value in effect through the 2019/20 tax roll, to .10% of value. To illustrate how this works, assume a $500,000 home is revalued at $1,000,000 as follows:
Value of $500,000 @ .25%= $1,250 assessment
Value of $1,000,000 @ .10% = $1,000 in assessed value
Despite a 100% increase in value, Curran’s sleight of hand reduces the assessment by 20%. Under existing law, the 6% cap on increases in assessment cannot apply.
The decision to remove Nassau homeowners from this built-in 6% protection carries tremendous risk to the financial stability of Nassau residents. The terms and provisions of the proposed phase-in have not been released but if similar to the Greenburg program, Nassau homeowners will receive little protection from large tax increases.
The State Legislature only approved a two-year phase-in for Greenburgh. Such phase-in requires a detailed written application. Owners who have tax arrears cannot receive a phase-in. The home must be owner-occupied and eligible for a STAR exemption. This precludes homes occupied by the owner’s children or parents. It may also preclude Nassau taxpayers who own homes in Florida and have homestead exemptions in that State who do not qualify for STAR exemptions in New York.
Again, the most important eligibility requirement is that the assessment (not the value) must be higher than the previous year. Since assessments in Nassau are actually going down while values are going up, the Greenburgh phase-in will do nothing for our homeowners. Overall, the Greenburgh program does not appear to be a viable phase-in program for Nassau County.
The solution is simple. Return the level of assessment to. 25% immediately and allow assessments to increase along with values – then cap them by 6%. Done!
Michael Schroder, Esq. is an expert in tax certiorari law and the co-founder of the law firm Schroder & Strom, LLP. He and his business partner, Karen Strom, have been grieving residential and commercial real estate taxes on Long Island in Nassau County and beyond, since 2000.