Will The Governor’s Property Tax Cuts Be Derailed By Foreclosures?
Thursday, February 27, 2014
Could Governor Cuomo’s property tax proposals be sabotaged by the ongoing foreclosure crisis?
During Gov. Cuomo’s recent February 19th visit to Nassau Community College on Long Island he re-confirmed the details of his multi-billion dollar tax break proposal. However, hopes of a massive budget surplus could come up short if anticipated tax revenues don’t come through.
The biggest potential threat to tax income is perhaps property taxes. Foreclosures may be fading from the headlines by they aren’t gone. In fact, there are still millions of U.S homes in some stage of foreclosure.
There has been a significant lag between defaults and actual foreclosures as evidenced by a Bloomberg report showing homes now being foreclosed on are some 3 years past due on payments.
Honing in on New York via data from RealtyTrac we see that as of January 2014 bank repossessions were up over 117%, foreclosure auctions spiked 130% from the previous month and pre-foreclosure notices rose over 17% over January 2013.
Zooming in on Long Island foreclosure rates in Suffolk and Nassau County are around double that of New York as a state.
Much of the real state of the real estate market and foreclosures is being masked by the flip flopping of bad debt. Some $35 billion of non-performing loans were sold off by big bankers last year and over a billion dollars of them are being auctioned right now.
You’ve got to appreciate the fancy foot and paper work, but as more and more of this bad paper is pushed off onto smaller private investors the risk increases. Many may not even be aware of the need to cover property taxes on the property secured by these loans leading to a deficiency which could suck the surplus right of the budget.
This also means more pressure on local authorities to push hard to raise property tax bills and collection rates.
The bottom line here is not to rely on promises of what could be and end up becoming a victim of even more obscenely overblown tax bills. Get yours down by appealing your tax bill and assessed value.