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Property tax in New York is a major money maker for local governments, bringing in billions of dollars and accounting for almost half of all tax-based revenue. Considering this fact, it may be surprising to hear that parts of the state (including New York City) have tax rates well below the national average.
If you own property in this state, you can expect high tax bills due to the high property values.
Paying property taxes is many people's least-favorite thing about owning a home in the Empire State, but it is a requirement for almost everyone. Whether you own a residential property, apartment buildings, commercial buildings, vacant land, or even a mobile home- you are expected to pay your bills annually or face the prospect of losing your property.
The best way to prepare for real estate taxes is to understand how they work, how they are calculated, and when they are due. Our owners guide to property taxes in New York covers all this and more to help you stay informed.
Understanding the Different Types of New York Property Tax Bills
Most property owners in New York State will receive two property tax bills each year.
- School Tax Bill: The first bill generally arrives in September, covering school and library taxes for your area.
- County, Town, and District Charges: In early January, the second bill arrives that covers the general charges for your town or county plus any special charges in your district.
The exact timing of these bills arriving can vary between counties- but they generally contain the same information about how much you will need to pay, why you need to pay that amount, and details of your property's assessed value- which you can contest if you feel it is inaccurate.
When Are New York Property Taxes Due Each Year?
In most counties, property taxes are due to be paid on March 1st each year, but there are some variations in payment deadlines between municipalities and districts.
To better understand when you need to pay your bills, it is best to contact your local authority. It also helps to understand the property tax calendar for a more detailed breakdown of the annual process.
Here is a brief overview of the property tax calendar in New York.
- Taxable Status Date (March 1st in Most Areas)
As well as being the date when most property taxes are due to be paid, March 1st is also the date for exemption applications to be submitted and assessment impact notices to be sent (this can sometimes be slightly delayed).
- Tentative Roll Date (May 1st in Most Areas)
First results of value assessments are sent out to give people time to review them and decide whether or not they want to make an appeal.
- School Budget Vote (Third Tuesday in May)
Every of-age voter can participate in a vote to confirm the school budget, which will directly impact the tax they pay.
- Grievances and Appeals (Fourth Tuesday in May)
This is the deadline for submitting an appeal for your assessment.
- Final Roll Date (July 1st in Most Ares)
Reviewed value assessments are rolled out with finalized figures. Unless you make a second appeal within 30 days, this will be the amount you are taxed on.
- School Tax Bills (Beginning of September)
School property tax bills are issued, and the payment deadlines are confirmed. These can vary, so pay close attention to the communications you receive.
- Municipal and County Tax Bills (Beginning of January)
The second bills are delivered. Usually, the payment due date is March 1st, but again- it might be different in your county. Exact deadlines are provided when the bills are issued.
What Are the Consequences of Late Payments for Property Taxes?
Like most states, failure to pay your property taxes in New York can lead to a tax foreclosure, which could mean you lose your property.
This happens when delinquent tax bills become a lien on a property (essentially a claim against you, making your property collateral for debt collection). If they remain unpaid, the local taxing authority has to option to foreclose the lien to collect the money it is owed. This means your property is eventually sold.
In some cases, rather than foreclosing, the taxing authority can sell the lien rather than foreclose, which means someone else then has the right to foreclose or claim the property.
Luckily, you have some time before this can happen, and there are ways to avoid it getting that far. Even if a lien is sold, you have time to pay back everything owed (including the original debt, the interest, all penalties accrued, and any other relevant charges) and reclaim your property.
Before it gets that far, the penalty for late payments is 1% per month over the due date. If your bills due in March are $3000, in April, they will be $3030. By the time they are one year overdue, the new debt will be $3600- not including any extra fines or charges applied by your district.
How Do You Pay Your Property Tax Bill in New York?
It is possible, in most counties, to pay your property taxes online through the New York State Department of Taxation and Finance. You can set up an account and manage your bills easily throughout the year. Payment options are credit and debit cards.
You can also settle your bills via mail or in person at the designated local office in your district. Additional payment options here are cash and check.
How Much Are Property Taxes in New York?
Property taxes are different from county to county and depend mostly on the value of your property. Tax rates are decided locally, which further diversifies the amounts people are likely to pay.
Overall, New York State has a high tax rate, but New York City and Kings are actually below the national average. The New York City Department of Finance sets the local property tax rate at 0.98% as an effective percentage- but because of the high property values, it also has the joint-highest average tax bill amount ($10,000- along with Putnam and Suffolk).
The highest rate for property tax in the State of New York is 3.40% in Orleans- which is also one of the highest rates in the country. Conversely, Kings has the lowest rate, at just 0.78%.
These rates can all change every year as the market value fluctuates and local governments' budgetary requirements change, but adjustments are capped at a 2% increase unless voted upon with more than 60% approval.
On average, the New York State property tax rate is currently 1.69%- landing it in the top 10 highest rates in the country. The median property tax payment is $5732, although it could be much more or much less depending on where you live. Hamilton has the lowest median property tax cost in the state at $1834- more than $8000 less than the highest costs in the State.
Assessed Property Values
A crucial part of determining how much tax an owner should pay is determining the market value of their property. Assessments are made in each area, and a value is appointed to every owned property. This is meant to happen every year- but it is not always the case.
It is not the market value that is considered when taxing, however. New York applies what is called an RAR (Residential Assessment Ratio), meaning only a percentage of a property's value is taxable.
Residential Assessment Ratios vary between districts. Although it is the assessed market value and not the RAR-adjusted value that decides how much tax you are going to pay, you can use the RAR to determine if you have been over-assessed (meaning your property has been valued unfairly, and you are being charged more tax than is fair).
You can appeal your assessed value if you feel it is unfair, but you need to provide evidence to show that the figure is inaccurate.
Local Levied Property Tax Rates
Local taxes are levied for each tax class (property types). There is no state-wide property tax rate. Instead, local governments, school district boards, and other relevant taxing authorities choose what tax rate to charge based on budgetary needs.
These tax rates are levied on the assessed value of a property to determine how much a person should pay.
Property Tax Exemptions
The third thing that influences how much your property tax will be is whether or not you qualify for an exemption. Exemptions don't change the tax rates, but they do reduce the taxable assessed value of your property.
You can find more details and some of the possible exemptions for homeowners in New York.
How Are New York Property Taxes Calculated?
Your property tax rate is calculated like this:
- Market Value x RAR = Assessed Value
- Assessed Value - Relevant Exemptions = Taxable Assessed Value
- Taxable Assessed Value x Local Tax Rate = Property Tax Owed
Say, for example, your property is worth $300,000 (as determined by the county assessor for tax purposes). If your county's RAR is 50%, the assessed value is $150,000. Unless you qualify for an exemption, this is the amount that will be taxed.
Property tax rates are expressed in two ways. In New York, it is usually shown as a millage rate, meaning dollars per $1000 of the assessed value. Alternatively, it is shown as a percentage of the total market value of your property (effective tax rate).
Let's take Queens as an example. The effective tax rate here is 1%. If the average property is worth around $575,000, the average tax bill is $5750.
If the RAR for Queens is 50% (just an example- rates can vary), then the average taxable value of a property would be $575,000 divided by two, which is $287,500. The equivalent millage rate would be 20, meaning $20 per $1000. A tax calculation in this case would look like this:
- $287,000 divided by 1000 = $287.50
- $287.50 times millage rate 20 = $5750
Anyone who qualifies for an exemption would have the relevant reduction made from the market value of their home before the following calculations happen.
Can New York Property Owners Lower their Property Tax Bills?
There are ways to lower property taxes in New York State for those who qualify. Your tax rate does not change, but you can reduce your payments by getting money taken off the actual assessed value of your property.
This is available through several exemptions, which reduce the taxable value of a home (usually primary residence only), so the overall bill is less.
New York also has a credit system that helps some homeowners pay toward their property tax bills.
STAR Credits
STAR Credit, or School Tax Relief, is an initiative that provides relief based on school taxes in the State. It is organized by school district services and applies to the first $30,000 of a home's assessed value.
You may be eligible for STAR Credits on your property (primary residence only) if you earn less than $500,000 per year and own a family home, condo, apartment, farm dwelling, or manufactured home.
There are some variations on STAR Credits, including exemptions for lower-income homes and enhanced rates for low-income senior citizens. Credits are received annually by check.
Senior Citizens Homeowners Exemption
Those who own property and are over 65 may qualify for the New York Senior Citizens Homeowners Exemption. It can reduce the assessed value of a property by up to 50% (with a limit of anywhere between $3000 and $50,000 as decided by local governments or school districts) as long as they meet the income requirements.
In some cases, you may still be able to get a reduction of less than 50% if you are over 65 and have an income higher than the determined limit. It is up to each district to decide what system they want to use.
Veterans Exemption
If a veteran buys a property in New York using money taken from their military pension, an insurance settlement, or a service-related bonus, they can apply for exemptions on their value assessments. How much it may be depends on the district they live in.
Veterans of the Cold War and those who earned expeditionary medals or served during wartime may also receive exemptions.
Disabled Homeowners Exemption
The rules for New York's disability exemption are much the same as for senior citizens. Up to 50% can be taken off the assessed value of a home if the person earns below the income threshold and can provide documented proof of their disability status.
Again, local governments can set the limit anywhere between $3000 and $50,000 and may award a reduced exemption to disabled individuals who earn more than the threshold.
Conclusion
Between the high tax rates and even higher property costs, many parts of New York State have some of the most expensive property taxes in the country. Although New York City has a below-average rate for the nation, it makes up for it in real estate prices as sky-scraping as its buildings.
Applying for property tax exemptions can reduce your bills if you qualify, so it is worth trying when the time comes. Paying on time and paying attention to the market value of your property compared to the assessments made for tax purposes are also ways to keep your costs where they should be.
All owners are expected to pay, whether you own a family home on Staten Island or invest in rental buildings in Manhattan- your annual tax bill must be answered.
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