Large Apartment Building Owners Pay Lion's Share of NYC Tax Revenue
Owners of large apartment buildings in the city are bearing more of the property tax burden than owners of one- to three-family homes, according to a recent report released by NYU's Furman Center for Real Estate and Urban Policy. The report is titled "State of New York City's Housing and Neighborhoods 2011."
According to the report, on average, New York City's tax on apartment buildings, which include rentals, condos, and co-ops, is the second highest among the 50 largest cities in the country, coming in only after Detroit. The report also reveals that the effective tax rate for apartment buildings in New York City is 4 percent. Whereas, the effective tax rate for one- to three-family homes in New York City is 0.6 percent—which is actually one of the lowest among big cities. The effective tax rate on a piece of property is defined as the final tax liability divided by the property's fair market value.
Apartment buildings account for 36 percent of the city's tax revenue. Meanwhile, one- to three-family homes and smaller residential buildings with up to three units make up less than half that amount, just 15 percent, despite the fact that they account for nearly half of the market value of all taxable property, according to the report.
Five community districts face the highest tax burden across the city, all of which, not surprisingly are in Manhattan, where there is a concentration of rental buildings, according to the report. Apartment buildings in Washington Heights/Inwood are hit with the highest effective tax rate of 4.3 percent. The other districts in the Top 5 include Midtown, Stuyvesant Town/Turtle Bay, the financial district, and the Upper East Side.