DOES THE VALUE OF MY COOP IMPACT MY REAL ESTATE TAXES?

Absolutely not!

If you live in a one- to three-family home in NYC, your real estate taxes are based on the “assessed value” of your property, which is calculated as 6% of its fair market value (based on comparable sales). But this is not the case for co-ops and condos. For these, the “market value” of each building is determined by a formula that has very little to do with actual fair market value.

For smaller buildings (10 units or fewer), the city applies a gross income multiplier based on similar rental buildings. For larger buildings (11 units or more), the city estimates potential income and expenses using comparable rental properties and applies a capitalization rate to determine the market value. An assessed value of 45% is then applied to that figure.

The city uses rental buildings as comps—probably because, historically, nearly all buildings in NYC were rentals before the waves of co-op and condo conversions in the 1980s and beyond. So the methodology stuck.

But it’s far from perfect. For example, a condo in Tribeca in a full-service building might be assigned a market value far below its actual worth because it’s being compared to a walk-up rental—possibly not even in Tribeca! That might be a slight exaggeration, but the flaws in the system are real. It’s entirely plausible that two nearly identical buildings on the same block have different “comparable” rental buildings used by the city for assessment.

This is exactly the case for my building at 15 West 81st Street and the very similar Beresford at 211 Central Park West. Both were built at the same time, by the same architect, with similar layouts and stature. In fact, the apartments in several lines are nearly identical in value—but the tax assessments are not.

Add to this the existence of rent-regulated units, which are still found in many buildings (though fewer than ever). If a building with rent-regulated units is used as a comp, it will show lower net rent due to those units—resulting in a lower assessed value. The city hasn’t yet adjusted for this nuance, though that could change soon.

And to make things even more confusing, there are various tax exemptions—like STAR, senior exemptions, and co-op/condo abatements—that may reduce your actual tax liability.

Once the city sets taxes for a condo, each individual unit owner is billed for their share based on the size of their unit. Co-ops, by contrast, take the total tax amount and divide it among shareholders based on share allocation—then include that amount in the monthly maintenance.

Most large co-ops challenge their assessments every year through tax certiorari filings. However, because NYC relies so heavily on real estate taxes, these challenges are rarely successful (though occasionally, they do prevail)

There may be some relief on the horizon. Trump has pledged to reinstate the full SALT (State and Local Tax) deduction, which he previously capped at $10,000 under the 2017 Tax Cuts and Jobs Act. That cap hit New Yorkers hard—especially homeowners in high-tax neighborhoods like Manhattan. If the full deduction is restored, high real estate taxes might become more financially manageable for many buyers, since they’d once again be deductible from federal income taxes.

While the topic might be dry—and the reality of paying real estate taxes certainly isn’t fun—taxes are one of just two things we can be sure of in life! So have a fabulous weekend… and try not to tax yourself too much!

Best,

Michael

Question of the Day

Have you ever been curious about how much New York is collecting in real estate transfer taxes?

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Local News

Eataly is launching a new fast-casual cafe at Rockefeller Center

New Yorkers, your next Italian obsession is arriving hot and fast. Eataly—the beloved Italian food hall known for its bustling marketplaces, freshly made pasta and dangerously good focaccia—is launching a brand-new café concept designed for life on the go.

Meet Eataly Caffè, a quick-service spinoff of the global culinary brand, opening its very first location at Rockefeller Center on May 15 at 5pm, with a second to follow soon at The Shops & Restaurants at Hudson Yards.

Designed with city life in mind, Eataly Caffè offers a more compact, grab-and-go version of its full-size siblings—but don’t confuse “fast” with “basic.” The menu reads like a greatest hits album of Italian favorites: espresso drinks brewed from Eataly’s exclusive 100% Arabica blend (roasted in Italy, naturally), flaky pastries, Roman-style pizza alla pala, tramezzini, panini, soups, salads, pasta and, of course, gelato.

According to Eataly North America CEO Tommaso Brusò, this marks a major milestone in the brand’s stateside evolution.

More Info: CLICK HERE

This 35,000-Square-Foot Food Hall

Will Transform Midtown Dining — Take A Peek

Shaver Hall, NYC’s forthcoming food hall, is going to change the way you think about the Midtown restaurant scene.

Elegant yet inviting, the 35,000 square foot space is located within Amazon’s Hank Building, which was once the sight of the iconic Lord & Taylor department store. It’s named in honor of Dorothy Shaver, the president of Lord & Taylor and the first woman to head a multimillion-dollar business.

Soon, it will be home to 11 food stalls, a steakhouse, and a modern bodega from ZGF Architecture, who’s responsible for the Portland International Airport renovation and Google’s Spruce Goose Hangar.

More Info: CLICK HERE

The Best Walking Tours In NYC

For A Day Of Sightseeing

Sure, bus tours are cool, but nothing beats touring NYC on foot!

Whether you’re commuting to work, meeting with friends, or exercising, it’s no secret that New Yorkers see much of the city by foot. However, walking the same paths day after day may keep you from seeing some of the most unique parts of the city, and what fun is that?

Though typically taken by tourists, walking tours in NYC can be one of the best ways to bust out of your usual routine and expose yourself to something new! Whether you’re looking for new hidden gems in your neighborhood, wanting to learn more about the city, or explore somewhere you’ve never been, we’ve got some guided tours that’ll do the trick.

Step into the city's charm — discover the best walking tours in NYC for an unforgettable day of sightseeing! Click the link below to explore."

More Info: CLICK HERE

15 West 81st Street, Apt. 11H

2 Beds | 2 Baths | 4.5 Room Residence | Co-op

Upper West Side | Maint.: $4,286/mo

Offered at: $2,500,000

A renovated, high-floor 4.5 room residence at 15 West 81st Street, one of the top white-glove pre-war cooperatives on the Upper West Side, Apartment 11H is a truly rare find. With multiple exposures and stunning natural light from every room, the home is bathed in brightness throughout the day. The owners have artfully blended a stylish, sophisticated mid-century modern design with high-end finishes, all perfectly integrated with period details.

Upon entering the home, you’re welcomed by a gracious foyer that flows seamlessly from the grand-scale living room to the dining room. Modern wall-to-wall carpeting was intentionally chosen to evoke an authentic mid-century aesthetic, while perfectly restored hardwood floors lie beneath, should the next owner prefer a different finish.

The foyer leads into a grandly proportioned 16' x 24' living room featuring three oversized windows that highlight beautiful northern exposures and iconic, open Upper West Side views. This space easily accommodates both formal dining and generous entertaining.

The newly renovated, windowed kitchen is outfitted with custom lacquered cabinetry, frosted glass fronts, Silestone countertops, and a handsome tile backsplash. The new appliance package includes a Fisher & Paykel side-by-side refrigerator, a Bosch oven and cooktop, a Bosch dishwasher, and a Bosch convection microwave.

The corner primary suite boasts three large windows with sunny open views to the north and west — even offering a peek of the Hudson River. The wall-to-wall carpeting continues into the sleeping quarters and a generously sized dressing room lined with a walk-in cedar closet, additional custom closets, and an in-unit washer/dryer. The en-suite, windowed bath is richly appointed with floor-to-ceiling marble, a striking checkerboard marble ceiling inlay, a deep soaking tub, a classic pedestal sink, and top-tier fixtures and finishes.

The second bedroom is equally generous, offering an oversized window with sunny southern courtyard views and a large walk-in closet. Its en-suite bath features beautifully preserved original tiles laid by Emery Roth — a hallmark of only a select few Upper West Side buildings.

Additional features include stunning Venetian plaster walls in the living room, new windows, through-the-wall air conditioning, recessed lighting in the kitchen, custom closets throughout, and a built-in audio-visual system.

See listing website: CLICK HERE

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Michael J. Franco

Lic. Assoc. R.E. Broker

M: 917.817.4122

mfranco@compass.com

Office: 646-982-0353

Compass is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.