It may be hard to fathom, but the next time you take a look at the Manhattan skyline and wonder how much property is really worth, you can think with reasonable certainty that it is collectively worth a trillion dollars.
That estimate will not be completely out of reason after a recent therealdeal.com article highlighted New York City's property tax assessments for 2018. This is based on the total market value for all assessed properties, which hit $1.16 trillion. This amount is a nearly nine percent increase from 2016's total, which crossed the trillion dollar line for the first time in the city's history.
According to data used to reach the amount, increases in Brooklyn properties fueled this year's rise. The assessment increase for multi-family homes was up 19 percent compared to 2016. Such buildings now sell for at least 15 times the rent roll; which makes them very valuable for tax assessment purposes. In fact, multifamily properties, as a whole, are valued at $538.8 billion for tax purposes.
While higher property values may be the impetus for higher assessments, some are concerned that so many people may be priced out of New York City through no fault of their own. It may be a case of “over-assessment” that residents may not be able to keep up with over the long term. It may bring about the resurrection of Section 421a, which may help developers who include affordable housing as part of new real estate projects.
Nevertheless, having a real estate attorney who is knowledgeable about how tax laws work and how money may be saved would be a benefit to homebuyers and developers alike.