September 10, 2019
NYREJ Ask the Experts: Tax bills are coming to Nassau and Suffolk Counties-What do they mean for your property?
In the coming months, both Nassau and Suffolk County property owners will receive significant tax bills. In Nassau County, the first bill will arrive in early October for the school taxes which typically represent 60% to 70% of a property’s burden. Suffolk County issues all tax responsibilities on one bill that arrives the first week in December. Unless, your property is located in a village, this bill accounts for your total annual tax burden. The typical concerns of increased tax rates and budgets have been exacerbated this year by the Nassau County revaluation and below we’ll examine the validity of these fears.
There will be No Impact From Nassau County’s Revaluation on the October School Bill
While no one ever looks forward to receiving their tax bill, there has been more apprehension than usual this year about future tax bills in Nassau County. The concern stems from a plethora of notices, tax impact statements, followed by amended and updated notices. The county’s efforts at transparency have been helpful in some respects, but confusing in others.
Our office has received a tremendous number of inquiries as to how these notices will impact the coming tax bills. The irony is that these notices bear no relation whatsoever to the October school tax bill. This is due to the extreme lag time in Nassau County between the publishing of the assessment roll, its finalization and the corresponding tax bills being issued. In fact, the new assessments published on January 2nd will not even have any effect on the January 2020 general tax bills either.
When will Revaluation Effect Tax Bills?
The new assessments from the county’s first revaluation in years will finally be seen on tax bills in October 2020 and January 2021. While potential tax impact statements have been published, these should only be used as a guide since there are a great deal of unknowns regarding those bills.
Budgets for “Revaluation Tax Bills” Have Yet to be Determined.
The first unknown is what budgets will they be fulfilling. Assessments are multiplied by tax rates to satisfy local budget amounts. Therefore, if school budgets increase, the tax rate typically increases in order to match that escalation. The budgets that determine the tax rates for the “revaluation tax bills” in October 2020 and January 2021, will not be determined until a year from now, thus leaving a significant variable in any future projections.
Taxpayer Protection Plan and Transitional Assessments
The second variable that must be considered are all the new assessed values and if properties will be fully assessed next year. Assuming the tax cap is not pierced, the burden resulting from the budgets will be redistributed based on each property’s new assessment. In order to calculate the tax rate, an analysis of which properties increased in assessment and which decreased will have to be performed in order to derive the new tax rate.
Absent the phase in of any assessments, simple math would indicate that if your assessment doubled, you should expect your taxes to do the same. Given that other assessments have changed as well, that calculation cannot be applied. Still, many property owners who have seen such an increase are bracing for the worst.
There are however, protective mechanisms by which owners are insulated from having full assessment increases take effect next year. Under the law, commercial property owners will have increases based on value phased in at 20% per year over a five-year period. While this is helpful to temper the shock of an increase, it also leaves those taxpayers whose assessments have stayed the same in the revaluation to carrying more than their fair share of the tax burden. Accordingly, tax rates must be increased for everyone to compensate for 80% of the increase in assessment being delayed to subsequent tax years.
Similarly, the county executive is still waiting for the Nassau County legislature to pass a similar measure for Class 1 residential properties that would limit both increases and decreases in assessment by 20% per year. The legislature has stated their desire to implement the plan, but only after they are satisfied with their review of other aspects of the revaluation.
Immediate Bills Known, Future Unknown
All these unknowns mean that we do not know all the figures we are multiplying (assessments and transitional assessments) and we do not know the amount of revenue they are required to create (budgets for school, town and county).
Our office is frequently asked to project taxes on existing properties, new construction and conversions. Applying a percentage increase of existing taxes can lead to very misleading figures. These projections require a level of sophistication that considers and applies all the forthcoming changes. If projecting taxes beyond this year, developers must consult with their tax expert in order to ensure they have the most informed expectations.
Brad Cronin, Esq., and Sean Cronin, Esq., are partners at Cronin & Cronin Law Firm, PLLC, Mineola, N.Y.
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Brad W. Cronin, Esq.
Brad W. Cronin is the founding Partner at Cronin & Cronin Law Firm. He has over 40 years of Legal Experience. Brad represents a cross section of many of the largest New York developers, property owners, national corporations, REITs and retail chains. He has extensive trial experience having successfully litigated and resolved high profile cases throughout New York State which has resulted in a number of landmark decisions in the field of Tax Certiorari.
Over the years Brad’s reputation for honesty and integrity has led to long term relationships with municipal assessment officials. His expertise and extensive experience along with his reputation has resulted in some of the highest property tax reductions in New York State.
Brad has been selected as a Who’s Who of Long Island Business News for the past 7 years in the fields of Tax Certiorari law and Real Estate Law. Each year Long Island Business News honors business leaders whose creative approach to challenges and positive results help to make Long Island better.
For over 30 years Brad has earned the highest rating awarded by Martindale Hubbell in both competency and ethics in his field. This is an honor bestowed on him by his peers for his professional excellence.
Brad is a columnist for the New York Real Estate Journal’s “Ask the Expert” quarterly feature discussing current real property tax issues. Some issues addressed are Hurricane Sandy’s effect on property taxes, Nassau County’s Disputed Assessment Fund, emerging market trends, New York’s property tax rates, and how your purchase price can affect your taxes.
Brad has been an invited speaker and participant on various panels involving different subjects affecting tax certiorari and valuation of property such as condominiums, environmental contamination, and reviewing changes in the tax certiorari field. As a member of the Nassau and Suffolk Condemnation and Tax Certiorari committees, he has worked to implement changes to facilitate the timely resolution of commercial tax protests.
Brad currently serves as executive member of the steering committee and served as Co-President of the Long Island Real Estate Group for three years. This organization has supported various Long Island charities, as well as real estate related projects, educational real estate programs and networking events. He is Cofounder of the North Shore University Hospital Department of Medicine Leadership Circle Committee and serves on the Village of Plandome Planning Board.
Sean M. Cronin, Esq.
Sean M. Cronin is a founding partner at Cronin & Cronin Law Firm with over 20 years experience. He specializes in negotiating tax certiorari matters for prominent developers, national REITs and tenants in Nassau, Suffolk, and Westchester counties, as well as the five boroughs. He is responsible for successfully reducing the assessments, and thereby the real estate taxes, on many of the largest properties in New York State thanks to his expertise in property valuation issues and knowledge of market conditions and demographics. His clients include developers and owners of all property types, including office buildings, industrial buildings, shopping centers and retail locations, restaurants, apartment buildings and condominium complexes, golf courses and assisted living facilities.
Sean is an Executive Board member and past Co-President of the Long Island Real Estate Group, a charitable organization created to support local communities. He is an Executive Board Member of Vision Long Island which advances more livable, economically sustainable, and environmentally responsible growth on Long Island through Smart Growth. Sean is an Advisory Board Member of the Viscardi Center and on the Board of Advisors of the Energeia Partnership. He is an active member of the Chaminade Lawyer’s Association and Real Estate Group as well as the Washington & Lee Alumni Association.
Sean is featured regularly in the New York Real Estate Journal’s “Ask the Expert” section and has been quoted in various publications, including the Long Island Business News and Newsday. He has been recognized by the Long Island Business News as a “Who’s Who in Commercial Real Estate” multiple times, most recently in 2023 and by the Long Island Herald as the Top Tax Certiorari Attorney in 2023.
