The property taxes vary greatly between New York City and the rest of the New York State. In NYC, property tax rates are a bit lower with 0.90%, while the rest of the state has an average rate of 1.68%. Some state counties (outside NYC) have tax rates above 2.50%.
However, the tax rates change each year due to changes in the school district or local government budgets, revenue, total taxable assessed value, and tax levy distribution among multiple municipalities.
New York State offers senior citizens, veterans, people with disabilities, among others, tax exemption of about 50% reduction in the assessed value of their residential property.
How Property Taxes are Calculated in the State of New York?
According to the New York State Department of Taxation and Finance, the property taxes are calculated by multiplying "someone's property taxable assessment (minus any exemptions) x the tax rates for school districts, municipalities, counties, and special districts". (tax owed = taxable assessment x tax rate).
To determine the market value of someone's property in the New York State, a local officer or assessor assesses the property to find its market worth. These assessments happen annually, and each tax area is assigned a Residential Assessment Ratio (RAR) that represents the ratio between assessed values and current market values.
RAR does not affect the taxes someone pays, but it makes sure someone's property is not over-assessed.
What Property Tax Exemptions are available in the State of New York?
When it comes to calculation of property taxes among different customer segments in NYS, some segments, such as that of senior citizens, have been exempted from taxation.
Senior citizens and people with disabilities are given up to a 50% reduction in the assessed value of their residential property by the New York State. For senior citizens to qualify for this exemption, they must be 65 years or older and meet other requirements such as certain income limits.
Veterans receive an exemption that reduces their assessments when they purchase property using money from their insurance settlements, pensions or bonuses. Also, people earning less than $250,000 are given STAR exemption during property tax calculations.
Insights on Properties Exempted From Taxation in the State of New York
- Government Property: Properties owned by the school districts, United States, New York State and its local governments, and foreign or native American is exempted from taxation. (Local Government & School District: $103.6 billion = 23%, New York State: $44.8 billion =10%, and U.S., Foreign or Native American: $14.1 billion = 3%).
- Residential/Individual Property: The most common residential exemption is for School Tax Relief (STAR), which exempts a portion of the value of a taxpayer�s primary residence for school tax purposes only. Other individual exemptions vary and may cover property owned by volunteer firefighters, veterans, senior citizens, and others.
- Non-Profit Organizations Property: Properties owned by the charitable, religious, hospital, mental improvement organizations are not taxed by the state. (The total amount exempted in this category in 2016 was $66.1 billion = 14%).
- Industrial/Commercial Property: To encourage and increase economic development, commercial/industrial properties are sometimes exempted from property taxes by the state. (Amount exempted in 2016: $33.9 billion = 7%)
Is there any option to payment Property taxes in Installments in the State of New York?
The New York State has an Installment payment agreement (IPA). IPA is an agreement between the state and people who are unable to pay their taxes in full. The agreement allows them to make monthly payments towards their unpaid tax balance. However, the person will continue to accrue interest and penalty on any unpaid balance for the period of their IPA.
Learn more about Property taxes and pay them online here.