According to Patch.com, New York City is facing a $9 billion deficit in the weeks leading up to its annual deadline to pass a city budget -- one that is sure to be compounded by projected shortfalls in property tax income. Property taxes are one of the main budgetary items over which the city has decision-making powers, and real estate taxes represented 53% of the city’s annual tax income last fiscal year.
The oversized tax burden on property owners in the city is well documented and discussed; less ballyhooed is the interest rate that has been imposed on delinquent payers since 1991. Since that time, unpaid taxes on large properties have garnered an 18% interest, according to a report in The Real Deal.
But now that the effects of an historic global health crisis have wreaked havoc on an already volatile industry, real estate and other leaders are saying it’s time to reexamine how property owners are charged for being late or delinquent on their tax payments. With inflation and interest rates at historic lows—and with landlords, homeowners, and cooperative corporations receiving less and less of their expected rental, maintenance, and assessment income each month that the shut-down wears on—the question of how late fees should be handled is meriting more attention.
TRD’s reporting indicates that the New York City Banking Commission has recommended an elimination of late fees—but only for properties with an assessed value of $250,000 or less, and only for delinquency on the upcoming July 1 payment date if a COVID-19 hardship can be proven.
City Comptroller Scott Stringer, characterized by TRD as a mayoral contender for next year, has urged the commission to “use every tool at our disposal to provide compassionate relief.” As the third member of the commission (along with Mayor Bill de Blasio and his appointed finance commissioner Jacques Jiha), Stringer appears to be the minority opinion of that body.