Vaccine layoffs, fire sale prices on condos and big government spending bills are just some of the factors influencing housing costs in New York this year. How will these trends impact you, and your property taxes?
NY, New Taxes
High and constantly rising taxes are nothing new for New Yorkers. Yet, this year has already brought an unprecedented amount of tax hikes and new taxes. There are likely a lot more on their way.
In addition to the anticipation of higher income, business, sales and annual property taxes, new proposals are taking aim at retirement accounts and gains. This includes stripping away the tax saving benefits of IRAs. As well as a proposed tax on unrealized gains that is being floated to pay for the new multi-trillion dollar spending bill. While the details are unclear, this may incentivize many to sell properties sooner to avoid big annual tax bills, without any more money coming in for them. Most won’t want to pay a new huge tax every year that the IRS says their property value went up.
Even though NY seems to be one of the strictest when it comes to freedoms under COVID, and one of the most vaccinated states, many have chosen not to take the vaccine.
Only around 60% of those in NY have been vaccinated. That ratio falls to around 48% in some groups.
Mandates are now forcing businesses to fire and layoff workers who chose not to get the vaccines. That’s in spite of already high unemployment rates, which top 10% in NYC. This includes many healthcare workers.
These layoffs should no longer be a surprise to workers. If even doctors and nurses are refusing the jabs, then surprisingly there may be even more who chose not to, despite not being able to eat out, go to the gym, or to enjoy other freedoms.
If they can’t work, shop, dine or play, it seems quite likely many must already have plans to move out of state. Many may have no choice but to sell their homes fast at any cost.
Extreme Discounts On NY Real Estate
While Zillow and others keep talking about how hot the American real estate market is, the experience on the ground locally can feel a lot different in New York.
The New York Times has recently reported on the fire sale deals being offered on NYC condos. Some builders have been glad just to cash out remaining units at a loss to get out. Even celebrity run brokerage Serhant, has dropped prices in one Tribeca building by 38%. Tens of thousands of dollars in breaks on parking and common fees are not uncommon. Last year landlords were renting units for 70% less. Yet, there is still already an oversupply, and too few qualified buyers for today’s tough mortgage underwriting criteria.
Other owners may begin to list to try and sell before this devalues their own properties.
Lower sales prices should theoretically bring values and tax assessments full circle, dramatically reducing annual property tax bills. Just don’t expect those breaks to show up in the mail. You’ll have to challenge and appeal your bill to get the savings you are entitled to.
Whether staying or going, New York property owners can expect more taxes. Some may want to avoid more taxes, including those on trying to leave later. Though when selling, your property tax bill makes a difference. If you are staying you definitely have to reduce them. There is just no telling how high your living costs and taxes will be in a year from now. Make sure you are ahead of that.