Are you a homeowner in New York City? If so, then you’re likely familiar with property taxes.
However, when selling a house in New York City, most owners tend to ignore the property tax involved. When selling your home, you must examine the applicable tax laws, as they can significantly affect your bottom line.
Keep reading to find out which tax laws most people tend to ignore that affect their bottom line.
New York Property Tax Laws
So, what is property tax? Is it mandatory to pay NY property tax?
Property tax refers to the tax imposed on individuals or other legal entities selling a property. You pay it according to the assessed value of the sold property, including the land. The local government calculates it where the property is situated, and the property owner offsets the accrued charges.
Property tax is not handled the same way as personal property or income tax. Officials base it on the assessed value of your home, which they establish yearly and determine after three years in many areas. In other jurisdictions, the evaluated value is the market value.
To get the accurate estimated value, the assessor first predicts the market value using either one or consolidating three methods: sales evaluation, cost, and income.
New York City Tax Laws
When we buy houses in New York and fail to pay these taxes, we may face severe consequences.
These consequences include a surge in money owed via fines and fees and tax foreclosure. The amount of debt that is past due, which entails the accumulated taxes, interest, penalties, and costs, becomes a lien on your home.
The local law can ultimately foreclose the lien to collect the remaining amount. Some places in New York sell tax liens certificates. This option suggests that they sell the current lien on the home to collect unpaid taxes. You still could lose the property. In New York, officials can either auction or sell the tax lien.
However, in New York, the tax collector must serve you with written notice and make efforts to reach you individually before putting your property on sale. They should send you the notice in about a month and a half to four months, and it should also be published in newspapers.
In New York State, the property tax is collected and applied locally to finance local government and schools the government owns. Although the state does not directly gain any benefit from the tax, it is still beneficial. It is the most significant single revenue source for municipalities and special districts.
Before taxing a property, state laws require the local government to conduct proper property tax administration to identify its valuation, the application of the correct tax rate, and collection. Property tax is applied on residential property, condominiums, and commercial buildings.
Fortunately, you can stop a tax sale in New York by offsetting the delinquent amounts. You can promise to pay the outstanding amount via installments, preventing the collector from proceeding with a sale.
New York Property Tax Bill Relief
The property tax exemption bill minimizes the tax burden if you are a qualifying homeowner and helps settle tax-related debts. It applies to both individuals and businesses. However, your eligibility will depend on your current status with the IRS and the amount owed.
To be eligible for tax charges relief, you must have been a school district resident that adhered to the New York State property tax cap.
New York Property Tax Exemption
New York has numerous tax exemptions available to its locals. The exemption can decrease the accrued amount of the tax, whether for your home or another real estate. To benefit from this, you must file a claim in the office of your resident tax assessor.
The most prevalent type is the exception from key residences, which is given to owner-occupied homes and can decrease or face out your liability for property taxes. Your local tax laws will determine the number of tax exceptions.
To determine your eligibility for tax exemptions, you can reach out to your local tax assessor’s office. They can assist you in establishing the existing exceptions and how you can apply for the ones you can qualify for.
The New York State constitution obligates a tax on all property unless New York tax law is particularly exempted. There are various exceptions outlined in the Real Property Tax Law (RPTL).
The homestead exemption is the most prevalent property tax exemption, which offers New Yorkers an exception from taxes on a home. Other exceptions include senior citizens, veterans, and the impaired.
If your home is your primary residence, you may qualify for a homestead exemption.
Senior Property Exemption
The local government gives this exception to senior New Yorkers who have attained specific years of age. Some places may put eligibility on social security status. There is an exception for houses, co-ops, and condos over 65 years old.
Veteran Property Exemption
The veteran exemption is given to the armed forces and veterans members.
If you live with a disability, you can get relief from some portion of your property taxes.
Who Is Responsible for Setting Taxes?
Municipalities, city and county commissions, water management districts, school boards, and distinct districts set the property taxes in New York.
These entities have representatives or policies that are determined by an election.
This fact means that you must be aware of your rights as a voter and your property tax rights if you want to affect how taxes are set.
What Are Your Tax Rights
Below are some of the rights that you possess as the taxpayer:
Assessing Property Value
Your resident property assessor sets a value on the property based on the existing market value. Some exceptions may lower this value. If you disagree, you can check with your local property appraiser for comprehensive information.
The property appraiser subtracts any exceptions from the evaluated value, and you are left with the final amount, which is the property tax bill.
Property owners have the right to make sure they get information concerning the planned assessments, tax rates, public hearings, and non-ad Valorem assessments.
Non-Ad Valorem or Special Assessments
These are fees for specific services. The amount you pay does not reflect your property’s value. Taxing authorities set these fees, such as school districts, municipalities, and cities. The fee may be added to your TRIM notice as non-ad Valorem assessments or sent to you via a different mailed notice.
Taxing authorities should conduct hearings about their separate assessment services fee per your rights.
They will send the notice via mail at least one month before the hearing date. The notice must include the cumulative amount due for your property. You have the right to show up at the hearing and file a written objection with the local governing board.
Tangible Personal Property
This situation occurs mainly to business owners. You may have accrued tax for tangible personal property. For instance, equipment and other items not incorporated in your company’s real property’s evaluated value are taxed as tangible personal property.
Businesses that have accrued tangible personal property have the right to ask for a time extension. This option will help you to file a substantial personal property tax return. If you filed tax returns late, you might ask for a decrease or waiver of the penalties.
Your native tax collectors send you tax charges for the current year, expecting you to offset all the taxes.
Every taxpayer has the right to receive a written notice of the tax not paid and any available discount to pay at the right time.
For many homeowners, the cost of selling a house in NY can be nerve-wracking.
This fact is especially true if they are unfamiliar with all the necessary procedures. Keeping in mind these tax laws and their exceptions, you can save money on things that some homeowners aren’t even aware of.
While property taxes in New York are some of the highest in the nation, you can still find considerable ways to reduce the money owed for your taxes. If you reside in a high-tax county, contemplate relocating to a low-tax county.