The Oddities of the New York City Property Tax Structure

It is, in some of the social circles of the super-rich and super-famous, considered a necessary status symbol to have a swanky New York Apartment. You would expect that, in a civilized society, those who have more income than they know what to do with would be asked to pay higher property taxes than those struggling to get by. On the off chance that you are more cynical than that, you might still at least hope that the homes of the mega-rich are taxed at the same rates as the average person.
Welcome to New York City.
In this city, according to one viewpoint that is often decried as hyper-cynical, the super-rich basically tell others what's going to happen and how it's going to happen.
Before you decide that such sentiments are limited to the overly-sensitive feelings of out-of-touch leftists, consider the property taxes of this fair city. Rupert Murdoch – who recently bought the Wall Street Journal at a price that was about sixty percent greater than its value – has a home in an apartment that he bought several years ago for $44 million. It's probably worth considerably more than that these days. He pays an annual property tax of $55,000. While that may seem like a lot of money, it is, percentage-wise, equivalent to someone who has a $500,000 home paying a comically low $625.
There are many super-valuable NYC apartments that enjoy considerably greater tax-breaks than Mr. Murdoch's apartment.
Indeed, property taxes in the city are not based mainly on the typically-accepted progressive tax structure where the rich pay more; or even, for that matter, on a flat tax system, which is generally considered by mainstream economists to be barbarically regressive and terribly unhealthy for the economy.
They are based on a far more intricate tax-code that is filled with economic incentives and other measures that more often than not do more harm than good.
Measures that were written to encourage construction of low-income housing and other progressive goals are just as often exploited by the wealthy and their accountants in a ways that end up doing little more than robbing the city of revenue it desperately needs to fix an ailing public education and health system.
Though, to be fair the the NYC property tax code, it has strongly encouraged the construction of co-ops instead of condos. These co-ops did save the city from much of the subprime mortgage crisis that the countries banks helped bring on.
So, an attack on the unfairness of the tax code for NYC apartments is not a diatribe aimed at those who think government manipulation of the economy inherently leads to failure.
It is simply to say this: If you purchase a condo, you are much more likely to pay property taxes at higher rates than the wealthy who own some of the most luxurious co-op apartments in the city. Many corporations are similarly charged lower prices than most individuals.
Life isn't fair, but the tax code for New York apartments is really unfair.

Nicholas Adams Judge is a freelance writer specializing in business, politics and economics. He holds a B.A. in political science and will begin his PhD studies in political economy and public opinion next fall. He has studied economics and political science at a number of different institutions, both here and in the U.K., including Amherst College, Warwick University, Oxford University and the University of Massachusetts-Amherst.
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