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How is the value of property assessed for tax purposes in your state? Which types of property are subject to tax?
In New York, all real property is subject to:
- real property tax;
- special ad valorem levies; and
- special assessments (unless exempt by statute).
Personal property is generally not subject to property tax. However, tangible personal property that is affixed or erected on real property is subject to property tax.
What is the state property tax rate?
There is no state property tax in New York. The property tax is a local tax, raised and spent locally to finance local governments and public schools.
What is the range of local property tax rates levied in your state?
The property tax rates are determined annually based on the budget of the locality imposing such tax. The tax rate is imposed on the assessed value of the real property, which may be lower than the fair market value of the property. New York State imposes constitutional limits on the percentage of the tax and the allowance for inflation.
Exemptions and deductions
What exemptions and deductions are available?
New York State law provides various exemptions from property tax that are based on a variety of factors, including ownership, location, or use of property (or a combination thereof). Available exemptions include:
- charitable organizations;
- government-owned property;
- educational organizations; and
- housing programs.
What filing requirements and procedures apply?
Property taxes are assessed by the local jurisdiction imposing such tax and furnishing a bill to the property owner. The deadlines for when assessments are finalized and payments are due varies by each assessing district. In New York City, property tax bills are finalized in June and the payments must be made quarterly, although prepayments are allowed.
Real estate transfer tax
How is the transfer of real estate taxed in your state (including tax base, rates, exemptions, and filing formalities)?
New York State and New York City impose transfer taxes on the transfer of real property or an interest therein (each jurisdiction has a complex definition of ‘interest in real property’, which includes the transfer of a controlling interest in an entity that owns real property in such jurisdiction—certain transfers of interest may be aggregated for this purpose). Transfer tax is also due on the creation of certain leasehold interests. In New York State, the rate is generally $2 for every $500 of consideration or fraction thereof. New York State imposes an additional 1% transfer tax (mansion tax) on the transfer of residential property where the consideration is $1 million or more.
Other local jurisdictions also impose real estate transfer tax. For example, in the Peconic Bay region, there is a 2% transfer tax (the basis of the tax varies depending on the township and whether the land has been improved).
In New York City, real property transfer tax applies when the consideration is greater than $25,000. Generally, for residential property, the rate is:
- 1% if the consideration is $500,000 or less; and
- 1.425% if the consideration is more than $500,000.
For all other types of property, the real property transfer tax is:
- 1.425% if the consideration is $500,000 or less; and
- 2.625% if the value is more than $500,000.
Excluding mansion tax—which is the primary obligation of the grantee—both New York State and New York City transfer taxes are primarily the responsibility of the grantor (although the grantee is secondary liable). Consideration for transfer tax purposes includes any obligations of the grantor (including transfer taxes) that are paid by the grantee.
New York State and New York City statutorily exempt certain entities from transfer tax, including the U.S. government and its agencies. However, if the other party is not exempt and the transaction is not exempt, the tax still applies and is paid by the other party. Further, both jurisdictions exempt certain transactions from transfer tax, including to the extent that the transfer represents a mere change in form with no change in the beneficial ownership and transfers to nominees. New York City also exempts transfers to and from charitable organizations.
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