March 11, 2025
NYREJ: How location shapes property taxes
The timeless saying “location, location, location” remains a fundamental principle in real estate valuation today. However, the way location influences the property tax burden for a commercial property is more complex. Commercial property taxes can differ depending on the taxable jurisdiction in which the property is located. Various factors — such as access, visibility, drive-thru capability, parking, and proximity to key infrastructure — not only impact property values but also affect the property’s tax obligation. For those in commercial real estate, understanding how these factors influence property tax calculations is crucial.
Commercial properties are taxed at varying rates based on the specific taxing entities governing their location. It is important to analyze these rates carefully, with particular attention to the school district, as it typically accounts for the largest portion of the tax bill. On Long Island, the highly fragmented system includes 124 different school districts, meaning that even comparable properties within the same town can face significantly different tax burdens depending on school district boundaries.
The tax burden is determined by an income analysis that considers the property’s revenue stream. Rental income is influenced by factors such as the property’s size, location, accessibility, and the types of businesses it can accommodate. Ironically, higher property values do not always translate to higher taxes, as this depends on the taxing jurisdiction. When more properties are developed in an area, the tax burden is distributed among a larger number of taxpayers. As a result, the total revenue needed to fund local services — such as schools, roads, and emergency services — is shared more widely, potentially leading to lower tax rates.
This is why jurisdictions partnering with industrial development agencies to promote housing and new developments play a crucial role on Long Island. The same applies to villages and downtown areas that have eased zoning restrictions to encourage growth. These areas are fostering overall growth beyond the high-profile new construction projects. By increasing property values and expanding the tax base, they distribute the financial burden across a larger number of property owners, helping to fund local budgets more sustainably than areas that have remained unchanged.
Some jurisdictions have taken proactive steps by implementing “master plans” or “overlay districts.” A recent example is Melville, which recognized the decline in the office market and developed a strategic roadmap for growth. The town board passed a resolution establishing an expedited approval process for developments in an area traditionally reserved for office buildings. This forward-thinking approach enables municipalities to adapt to changing market conditions rather than reacting out of necessity after their tax base has eroded.
Proximity to high-traffic areas significantly impacts commercial property values, as these locations offer greater customer foot traffic and revenue potential. Visibility is also crucial — properties easily seen by passing vehicles or pedestrians tend to attract more customers and hold higher value. For example, a retail store or restaurant at a busy intersection is far more desirable than a similar property in a less prominent location.
Accessibility is a key factor in determining property values and their associated tax obligations. Properties near major transportation hubs, such as train stations, are highly valued due to their convenience for both customers and employees. Conversely, commercial properties in areas with limited public transportation access often have lower values, as they attract less foot traffic, ultimately resulting in a reduced property tax burden.
For businesses like fast-food restaurants, banks, and coffee shops, drive-thru accessibility and parking are critical factors. Properties that can accommodate drive-thru services are often more valuable, as they appeal to customers seeking convenience. In some sectors, drive-thru access has become essential for competitiveness. Properties without a drive-thru, or those unable to accommodate one due to their size or layout, may be entitled to a significant tax reduction to account for their limited functionality.
After identifying the jurisdiction and school district a property falls within, it is essential to consider detailed location factors. Local development trends, visibility, accessibility, parking, and proximity to key infrastructure all impact property values for tax purposes. Understanding these elements is crucial for commercial property owners when making decisions about purchasing, leasing, or business operations. Properties lacking these value-enhancing features will typically be entitled to tax reductions, as they generate lower rental income and carry greater risk compared to more desirable properties.
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.
