Impact of COVID-19: Long Island Property Tax Alert | Farrell Fritz, PC
UPDATE: The Nassau County ASIA filing deadline has been extended to June 1, 2020 for Nassau County commercial properties.
As we face the threat COVID-19 poses to our very survival, we also face the threat it poses to our financial survival. Our federal, state and local governments are fighting on two fronts – protecting human life and trying to keep the frozen economy afloat. Property taxes play the primary role in funding all levels of local government and schools on Long Island. Unfortunately, the system that underpins property taxes is ill-equipped for a rapid response to the current crisis.
Events are moving quickly in all areas and we will endeavor to keep you informed of future changes as they unfold.
Property tax payment deadlines
Due dates have been extended for federal income tax payments, but at the time of this writing, property tax due dates remain unchanged. Many officials are calling on Governor Cuomo to intervene to change the last day for payment without penalty. As currently configured, the last day to pay Nassau County second half school taxes is May 10. The last day to pay taxes for the second half of Suffolk County is May 31.
Nassau County Grievance Filing Deadline Extended
The last day to file a grievance to dispute the assessment, which will determine your 2021/22 school and general taxes, is now. April 30, 2020.
Suffolk County Towns Grievance Filing Deadline
May 19, 2020 is currently the last day to file a grievance to dispute the assessment that will determine your 2020/21 property taxes. In order for a grievance to be filed, there must be an interim assessment roll released by May 1, 2020. Given the current “shutdown”, it is doubtful that cities will be able to comply. It was reported today that the cities are considering moving the publication date from May 1 to August 1 and the grievance filing deadline from May 19 to August 18. Stay tuned.
What happens to real estate values?
In the short term, the impact on property values can only be negative. On the residential side, brokers cannot show homes, so buying for now has effectively ceased. On the commercial side, if businesses are closed, they cannot pay rent. Long term, too early to tell.
If values are down, will my property taxes go down?
Not without federal or state government intervention. As noted above, the property tax system is not designed to respond quickly to changes in market value.
A prime example of the design problem are the May (possibly August – see above) assessment rolls for towns in Suffolk. These assessment rolls will be used to calculate taxes due beginning in December 2020. By law, published assessed values are meant to reflect the physical condition of the property as of March 1, 2020, but must be assessed using an assessment (assessment) dated July 1 2019. In July 2019, the economy was doing well and COVID-19 wasn’t even on the radar. Under the current system, any decline in value would not be reflected until the publication of the 2021 assessment roll and the issuance of the December 2021 tax bills.
The discrepancy is even greater in Nassau County. The most recently released interim assessment roll will be used to calculate taxes for 2021/22 and 2022 general school taxes. The assessment date is January 2, 2020, before any real impact is felt in New York City. or in the United States. Ironically, next year’s provisional assessment roll as of January 2, 2021 may reflect the market decline, but would relate to taxes as of October 2022, two and a half years after the spread of COVID-19.
But there is more. The property tax system is designed to pay municipal budgets. It is not designed to allow for deficit spending instead of collecting taxes. If all values were to drop by 10%, the tax rate would have to increase by 11% to compensate for the shortfall in budget revenue. Offering no relief to anyone.
Unfortunately, without some form of government-funded property tax bailout, taxpayers will remain straddling unreduced property tax bills. Given all the uncertainty in the market and the design of the system, taxpayers have only one choice: file an assessment grievance to perhaps reduce their taxes on an individual basis.
Feel free to access our COVID-19 Crisis Response and Assistance page here: https://www.farrellfritz.com/covid-19-update/