Challenging Your NYC Property Tax Assessment: What Every Homeowner Should Know

Challenging Your NYC Property Tax Assessment: What Every Homeowner Should Know

If you own a property in New York City, you've likely received a Notice of Property Value (NOPV) from the Department of Finance (DOF). This notice contains the city's assessment of your property's value, which is used to calculate your annual property tax bill. While the thought of challenging the city's assessment may seem daunting, it's a process that thousands of NYC property owners undertake each year. Understanding how to navigate this system can potentially save you a significant amount on your taxes.

This guide will walk you through the process, from understanding your assessment to filing a formal appeal.

Q&A: Understanding Your NYC Property Assessment

Before you can challenge your assessment, it's crucial to understand how the city values your property.

• What is the Notice of Property Value (NOPV)?

  The NOPV is an annual statement from the NYC Department of Finance (DOF) that details your property's market value, assessed value, and any applicable tax exemptions. It is typically mailed in mid-January.

• What's the difference between Market Value and Assessed Value?

  The market value is the DOF's estimate of what your property would sell for on the open market. The assessed value is a percentage of the market value, which is the figure your tax bill is based on. In NYC, the assessed value for most residential properties (Tax Class 1 and 2) is a percentage of the market value, subject to legal caps on how much it can increase each year. This is why your assessed value is often lower than your actual market value.

• Why would my assessed value be too high?

  Assessments are based on mass appraisal techniques that compare similar properties. If the city's data for your property is incorrect (e.g., wrong square footage, number of units) or if recent sales data in your neighborhood doesn't accurately reflect your property's value, you may have grounds to appeal.

Step-by-Step Guide: How to Challenge Your NYC Property Tax Assessment

The process for appealing your property assessment is primarily handled by the NYC Tax Commission, an independent agency that reviews appeals.

Step 1: Review Your Notice of Property Value (NOPV)

Carefully review the NOPV you receive in January. Check for any inaccuracies in your property’s information, such as:

• Square footage

• Number of rooms

• Construction date

• Number of units (for multi-family homes)

If you find a clerical error or an outdated description, you should first file a Request for Review with the Department of Finance. While this is not a formal appeal of your property's value, correcting these details can sometimes lead to a lower assessed value.

Step 2: Determine if You Have a Valid Claim

The burden of proof is on you, the property owner. You must provide evidence that the city's assessment of your property is too high. You can do this by:

• Comparing recent sales of similar properties: Look for comparable sales (known as "comps") in your neighborhood. You'll want to find properties that are similar to yours in size, location, and condition. The price per square foot of these recent sales can serve as evidence that your property's market value is lower than the city's estimate.

• Hiring a professional appraiser: An independent, professional appraisal is one of the strongest forms of evidence. A licensed appraiser will evaluate your property and provide a detailed report of its market value.

It's important to remember that you are not challenging your tax bill itself, but rather the assessed value on which it is based. A strong appeal demonstrates that the assessed value is disproportionately higher than the true market value.

Step 3: File an Appeal with the NYC Tax Commission

This is the formal appeal process. There are strict deadlines you must meet.

You must submit a completed Application for Correction of Assessed Value (form TC108 for Class 1 properties) to the NYC Tax Commission. You can file online, by mail, or in person at a DOF Business Center.

The application requires you to state your estimated market value for the property and provide supporting documentation. This is where your research and appraisal from Step 2 come in. The Tax Commission will not increase your assessment as a result of an appeal, so you have little to lose by filing.

Step 4: Prepare for a Hearing (Optional)

When you file your application, you can choose to request a formal hearing. While not required, this gives you the opportunity to present your case directly to a hearing officer and answer any questions they may have. You can represent yourself or have an attorney or tax certiorari professional represent you.

Step 5: The Decision

After reviewing your application and supporting evidence, the Tax Commission will issue a determination. The outcome can be:

• Your assessment is left unchanged.

• Your assessment is reduced.

• Your appeal is denied.

If you are not satisfied with the Tax Commission's decision, you have the option to pursue a judicial review through the Small Claims Assessment Review (SCAR). This is an informal, low-cost procedure for one-, two-, or three-family homeowners.

Tips & Takeaways

• Know Your Deadlines: The deadlines for filing are not flexible. Mark your calendar as soon as you receive your NOPV.

• Gather Strong Evidence: Don't just claim your assessment is too high. Back it up with a professional appraisal and solid comparable sales data. The burden of proof is on you.

• Don't Confuse the Assessed Value and Market Value: The assessed value is what you are appealing. Remember that the city's goal is to keep the assessed value below market value, so a small discrepancy may not be a successful claim.

• Consider a Professional: For complex properties or if you are uncomfortable with the process, a tax certiorari attorney or consultant who specializes in these appeals can be invaluable. They often work on a contingency basis, meaning they only get paid if they save you money.

Challenging your property tax assessment is a right every NYC property owner has. By being proactive and prepared, you can ensure your property is being taxed fairly and potentially achieve significant savings.

Thinking of buying or selling in NYC? Our team at Yeo Real Estate has the expertise and market knowledge to guide you through every step. Contact us today for a consultation and let us help you achieve your real estate goals.