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Dallek: Taxpayers’ rights are being challenged by Nassau assessments

Opinion //December 11, 2018 //

Dallek: Taxpayers’ rights are being challenged by Nassau assessments

Opinion //December 11, 2018 //

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By now, every residential homeowner in Nassau County should have received their Assessment Disclosure Notice. You should read it carefully and understand the implication to your 2020/2021 real estate taxes.

Basically, Nassau County reassessed everyone’s home to “market value.” The county has said that market value was obtained from comparative recent sales in your neighborhood, better known as comps. The level of assessment (uniform percentage of value) was reduced from .025 percent to .010 percent, a 60 percent reduction.

So, under the current system, if your house had a full assessment value of $300,000 your total assessment would be $750, ($300,000 x .0025). This amount of $750 would be multiplied by the tax rate per $100 of assessment to arrive at your actual taxes. Assuming a tax rate of $2,000 per $100 of assessed value, your actual taxes paid would be $15,000.

Now under the new re-assessed value, the same house will have a market value of approximately $900,000. The new level of assessment is .10 percent. Therefore, the new taxable value is $900 ($900,000 x .001). Assuming a consistent tax rate per $100, the actual real estate taxes would be $18,000.

Now the fun begins.

You should shortly be receiving from Nassau County a tax impact notice which should let you know the actual real estate taxes you will be paying with the re-assessed values. As of Nov. 21, the tax impact notice, as well as the comps used to obtain your market value, is available online. Nassau County should have sent the tax impact disclosure notices with your assessment disclosure notice to avoid confusion and additional mailing costs. Good question to ask Laura Curran.

New York State has a law whereas your assessed value can not be increased by more than 6 percent per year. It appears that the county will be side-stepping this law as they believe it doesn’t apply when a reassessment is made. However, to lessen the impact of an increase, the county may defer the increased real estate taxes over five years.

Nassau is using 2017/2018 tax year as the base year for their five-year deferral of increased taxes. However, if you recently had a successful reduction in your taxes for 2018/2019 and/or 2019/2020, you are out of luck. The county will not use the most current information as they say it is not complete. I am not sure of the logic behind this decision.

From discussions with my neighbors and clients, market value assessment has increased by approximately three times, whereas the level of assessment has gone down by 60 percent. Bottom line, almost everyone who has previously filed tax grievances, could possibly see their real estate taxes increased by 15 percent to 20 percent as compared to the 2017/2017 tax year. If you use the most current tentative assessment your new real estate taxes could increase 50 percent, without consideration of any five-year deferral program.

Nassau County has stated that there will not be a net increase in the total for everyone’s real estate taxes. However, there will be net winners and net losers. This is on top of the new federal tax law going into effect for 2018, limiting deductions of state and local taxes to $10,000, as well as increasing mortgage interest rates. Both of these recent changes are additional reasons why the new market values for 2020/2021 are too high. That’s little comfort to Nassau taxpayers who will now be hit twice.

What a good time to be a tax reduction firm, which you should consider using to protect your rights. You can always protest your own assessment online without using a tax reduction firm, but you must be aware of all the above changes. Commercial property owners should also be receiving their reassessments any day. It appears the fireworks from Nassau County and Laura Curran are early this year.

 

Jed Dallek, CPA, is a tax partner with Gettry Marcus in Woodbury.