According to the latest data nearly half of NYC property owners are unlikely to be able to pay their property tax bills this year. That number could prove to be far higher.
How can you avoid the risks of not paying your property taxes, even though property tax bills across New York could be set to soar through the next 24 months?
New Yorkers Can No Longer Afford Their Taxes
If our high tax bills weren’t enough of a burden, the NY Post reports a new study showing that COVID-19 restrictions and loss of income mean almost 50% of NYC property owners say they can’t afford to pay their full annual tax bill this year.
Individuals have lost income, while spending more on emergency supplies and high grocery prices. Landlords can’t collect rent or evict tenants for non-payment. Businesses and hotels have seen far fewer sales and customers.
This could mean NYC alone coming up $15B short on its annual budget. It is pretty much the same throughout the state and country. A new surge in the virus and fresh quarantines mean these dynamics are unlikely to change for the foreseeable future.
What Happens When You Don’t Pay Your Property Taxes?
When you fall behind on your property taxes a lien is put on your property. New fines and fees begin accruing, alone with interest. If you still can’t catch up, then your property will be foreclosed on, and can be sold for just what you owed in back taxes. Some property owners have lost their homes for less than $20 in overlooked property tax fees.
This means we could see many NY properties that have been held in families for generations finally lost.
Your Property Taxes Are Going Up
If it wasn’t already hard enough to keep up, property taxes are likely to keep on rising for the foreseeable future.
New tax assessments and bills are based on peak property values, right before COVID-19 disrupted everything. Even though your property may now be worth a fraction of what it was in January, you’ll be paying far higher taxes than you should, if you haven’t appealed.
When fewer taxpayers are paying their bills, then taxing authorities need to make up that money in the budget by spreading the charges across the few that are still paying.
Sales taxes usually make up a good portion of budgets too. Sales tax revenues could easily be down $1B or more in NYC alone this year. A shortfall which could be moved over to property owners.
At all levels governments are not only complaining about less money coming in, but rising expenses which will need to be offset by more taxes.
Everything from PPE, to riot cleanup, new safety desks in schools, and securing and maintaining freshly abandoned properties are all reasons likely to be given for raising property taxes again. That’s on top of a $1.65B tax hike on NYC owners in January.
What Can You Do About It?
Some are borrowing tens of thousands of dollars from friends and family members to try and keep up. Others are raiding their savings and retirement accounts, or are maxing out credit cards to make ends meet.
Don’t do any of these things until you’ve challenged your property tax assessment and bill. Otherwise you could be putting yourself under immense financial stress, and over paying by thousands or tens of thousands of dollars, totally needlessly.