The Importance of Filing a Tax Certiorari in New York City

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Each January, the New York City Department of Finance (DOF) sends every real property owner in the city a tentative real property tax assessment that determines the amount of tax the property will be charged for the upcoming fiscal year. This notice provides the market value and the actual assessed value of the lot, and, most importantly, the value upon which the real estate tax will be based.

 

But this tentative assessment, and the amount of tax it creates, is not set in stone! Real Estate Tax Certiorari is the legal process by which rent-producing properties, including apartments, hospitality establishments, and retail locations, can request a review of their real estate tax assessment. The certiorari is filed with the New York City Tax Commission. It is not available to private residents.

 

The forms filed include Forms TC-150, TC-201 and, if needed, TC-309. Based on the information completed on these forms, property owners claim that the real estate tax levied against them is excessive and should be reduced.

 

  • Form TC-150 is the Supplemental Application for a review of the property tax assessment.
  • Form TC-201, Income and Expenses Schedule for Rent Reducing Property, is attached to Form TC-150 and lays out the financial activity of the property over the previous year. Form TC-201 allows owners to explain any operating loss or increase in expenses. It helps provide a basis to challenge the property's assessed value.
  • Form TC-309, Accountants' Certification Form, must accompany Form TC-201 when the actual assessment of the property is $5,000,000 or more. It is signed by an independent certified public accountant who conducts an audit under generally accepted auditing standards. The current threshold is actually only $1,000,000, but pending legislation would raise this to $5,000,000. According to our informal contact with the city, the Tax Commission is operating under the assumption that the new threshold will become effective for the upcoming fiscal year.

 

The deadline to file Form TC-201 to protest real estate taxes for the upcoming fiscal year beginning July 1 year is March 1. Properties that have an assessed value of $750,000 or more, or were recently acquired, have until March 22 to file the form if required income and expense information is not available by March 1. The owner's legal counsel will then use the reported information to challenge the tax assessment.

 

In summary, the tax certiorari process provides a useful opportunity for property owners to protest and lower their New York City real estate property tax bills. Reducing property taxes provides a more palatable approach than raising tenant's maintenance fees and common charges to cover expenses.

 

LM Cohen & Company has the experience and expertise to prepare your New York City Tax Certiorari application and provide the independent audit when required. For additional information, please contact your LMC professional. All our prior tax alerts are available on the Updates page of our website.

 

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