NYC Department of Finance Ignores Comptroller’s Annual Economic Report When Valuing Commercial Properties For the 2023/24 Tax Year

In December 2022, the New York City Comptroller’s Office published its annual “State of the City’s Economy and Finances,” where Comptroller Brad Lander warns “the ongoing, and likely permanent, shift to hybrid work among office employees has had a lasting impact on New York City’s office market.”  According to the Report, office vacancies are up 46% from 2019 and daily visits to retail and entertainment venues are only at 62% of pre-pandemic levels. Perhaps the most glaring statistic is, “office square footage available for lease rose from roughly 85 million square feet in 2019…to 124 million in the third quarter of 2022” – an increase of 45%!

One might assume that the City’s Department of Finance would consider the Report in preparation of the 2023/24 tentative assessment roll (published January 17, 2023). Unfortunately, the Department of Finance chose a different path and, instead, increased the assessed value for office buildings by 6.85%, with office condominium’s receiving the highest average percentage increase of 8.62%. Even more eye popping, despite the hard times suffered by the theater and retail sectors, tax assessments increased for these property types by 9% and 6%, respectively.

Commercial property owners must pay close attention to their annual assessment notices. Tax Certiorari attorneys specialize in the review of tax assessments and can file the required paperwork prior to strictly imposed deadlines. New York City and Nassau County require tax appeals to be filed no later than March 1st, while most deadlines in Suffolk, Westchester County and the Hudson Valley are in May or June.

Thank you to Ryan C. Hild for this week’s Tax Tracker post.