NYC Property Tax Assessments: Understanding the Process and Appeals

Propery tax assessments in New York City can have significant financial implications for commercial landlords, especially in a city notorious for high property taxes.  

Understanding the assessment process and how to appeal your taxes effectively can substantially impact your bottom line and your property’s market value.  

This article will guide you through NYC commercial property tax assessments, the importance of filing the RPIE statement on time, and the benefits of seeking professional help to appeal your taxes.  

The Property Tax Assessment Process in NYC 

The New York City Department of Finance (DOF) assesses all properties annually. Here are some factors they consider for commercial properties: 

• Market Value: Estimate selling price 
• Income Potential: Rental income, vacancy rates, and operating expenses
• Property Characteristics: Size, location, condition, and usage
• Comparable Sales: Sales prices of similar properties in the area 

The DOF assigns a market value and then calculates the assessed value (a percentage of the market value). The rate is based on the building’s class and ranges from 6% to 45% of the assessed value. This assessed value is used to determine your property tax bill. 

The city uses a systematized approach to valuing property, often creating an inaccurate value assessment.  

Required Documentation for Appeals 

The Real Property Income and Expense Statement (RPIE) is an important document that every New York City commercial property owner must file, usually by June 1st annually. The RPIE statement helps NYC DOF determine the fair market value of these properties, which affects your property tax assessment.  

This form requires detailed financial information, including income and rent, operating expenses, and other relevant financial information. Failure to file the RPIE by the deadline can result in penalties calculated based on the property's assessed value, which can increase with continued non-compliance.  

Failure to file the RPIE timely can also affect a property owner’s ability to file a tax grievance, as the DOF may not allow you to contest your property tax assessment.  

Tips for a Successful Property Tax Appeal  

Many property owners unknowingly overpay property taxes due to inaccurate assessments. Appealing your taxes annually can help make sure that your property is assessed accurately year over year.  

Consistent property assessment appeals create a record of your property’s value, which can help prevent significant increases in the future.    

Working with a NYC Tax Professional 

While in many cases, you can file a grievance yourself, seeking professional help from a tax certiorari attorney and a CPA can significantly increase your chances of a successful tax appeal.  

Tax Certiorari Attorney 

A tax certiorari attorney specializes in property tax law and handles tax grievances and appeals. They can:   

• Evaluate the validity of your appeal
• Advise on the benefits of pursuing an appeal
• Recommend using a CPA for Tax Commission forms
• Develop a strong case using market data, property specifics, and legal argument
• Represent you before the Tax Commission during hearings
• Make sure you meet NYC’s strict filing deadlines to avoid missing out on appeals  

Certified Public Accountant (CPA) 

CPA can help you prepare the Tax Commission forms (TC-101, TC-201) and provide the TC-309 when required. They understand the complexities of the TC-201 form (Income and Expense Schedule) and can provide you with a TC-309 (Accountant’s Certification), which is required for properties that:  

• Generate over $100,000 in gross income, and
• Have a tentatively assessed value of $5,000,000 or more  

Form TC-201 is where most of your case arguments will be made to grieve your property taxes successfully. An experienced CPA will understand the specific expenses, amortization methods, and calculations and how to navigate unique property features for form TC-201 that the city will accept.  

Form TC-309 offers substantial assurance to the Tax Commission regarding the accuracy of your property's income and expense information. This form is an accountant's certification, indicating that they have audited your property's income statement (Form TC-201). Consequently, it provides the Tax Commission with confidence in the accuracy of the reported income statement. 

Stay Proactive During Property Tax Assessments  

Understanding NYC property tax assessments and appealing when necessary is essential for commercial landlords. Working with a CPA and a tax certiorari attorney can significantly improve your success rate. Staying proactive can help safeguard your investments, ensure fair taxation, and optimize financial stability.