Property Grunt

Tuesday, May 10, 2011

Barrier of Entry

A barrier of entry to live in Scarsdale and other elite areas of Westchester are the property taxes. This is a key reason why Westhchester has not truly stabilized. Buyers aren't balking at the prices, it is the property taxes that they are screaming about.

One of the rights that a homeowner has is to appeal their taxes by filing a tax grievances. And according to this NYT article a record number are successfully accomplishing that. It has also created a booming industry for contingency-fee assessment reduction.

I recommend reading this article because it explains why property taxes are a complete FUBAR in Westchester. Although there is no direct explanation, if you read between the lines, you can understand why towns like Scarsdale are against a property tax cap.

Flawed as it is, the current system allows a tremendous amount of flexibility. Since the current system issues a aggregate valuation increase each year applying to all properties. There is no individual assessment of properties. Placing a property tax cap would prevent taxes from going up, but it would also prevent them from going down.

According to Howard Rattner, the city’s finance commissioner of New Rochelle, he feels that once the housing market stabilizes, the grievances will drop because prices will be so low.

He is very wrong. Even after the market stabilizes, it is still going to cost an arm and a leg to pay for property taxes and as long as the tax grievance process is easy as pie, there will be no end to this.