(The Center Square) — The COVID-19 pandemic deepened New York City’s property tax disparities, with taxes rising even as property values dropped during the public health crisis, according to a new report by the state’s fiscal watchdog.
The report by state Comptroller Tom DiNapoli found that between the 2007 and 2024 fiscal years, median tax bills for the most expensive family homes in New York City grew by 131%, while median tax bills increased by 149% for the city’s least expensive homes.
DiNapoli said New York City’s residential real estate market has “proven resilient to the pandemic as prices remain strong,” which benefits the city as property taxes account for about 45% of its annual operating revenue.
“However, property tax disparity has gotten worse since the pandemic, which is concerning because it’s driving up housing costs for those less able to afford it, and at the same time, the city faces a shortage of affordable housing,” he said.
DiNapoli said a “recalibration of the process used to determine tax bills is needed if the city wants to remain accessible to working- and middle-class families.”
New York state has the fifth highest burden for property taxes, which account for an estimated 4.36% of personal income, according to a recent report by the personal finance website Wallethub. The median home value in New York is $340,600. The tax on a New York home at that value is an estimated $5,884, the report said.
The state also has the nation’s highest individual income tax burden, accounting for 4.72% of personal income, WalletHub said.
Tax experts say states like New York with higher tax burdens are seeing a flight of individuals leaving for states with lower tax burdens.
In 2021, New York lost an eye-popping $24.5 billion in state-adjusted gross income as residents fled to New Jersey, Florida and other low-tax states, according to Internal Revenue Service data.
