Friday January 03, 2025
Each year, New York City’s Department of Finance (DOF) reassesses the market value of condominium and cooperative properties to calculate real estate taxes. These annual assessments often estimates a property’s income and expenses, which can yield inaccurate valuations and inflated tax bills for individual condominium unit owners and for cooperative corporations.Tax certiorari, also known as tax protests, is how condominiums and cooperatives can secure valuable reductions on their assessments.
Considering the staggering cost of real estate taxes in New York City, annual tax certiorari filings can result in significant savings and should be considered an essential component of a board’s financial plan. Unlocking these reductions can be quite complex and one mistake could mean losing a six-figure reduction. Working with a trusted attorney and a capable management company is key to a successful outcome.
To help maximize potential reductions, FirstService Residential’s in-house compliance team has partnered with Goldberg Weprin Finkel Goldstein, one of New York City’s premier tax certiorari firms.
How does the DOF calculate the market value of condominium and cooperative properties?
A property’s perceived market value is the basis for annual tax assessments. However, rather than aggregating the market value of each unit to determine the market value for a cooperative or condominium, the DOF uses market data from comparable multifamily rental building comps to estimate a condo or co-op’s overall income and then estimates the expenses that would have been incurred if the building operated as a rental building. After determining the estimated net operating income, a capitalization rate is applied to determine the market value and the appropriate assessment.This comp-based approach can lead to inaccurate comparisons and inaccurate tax assessments.
"We often see significant increases in property taxes caused by annual reassessments. These unanticipated costs can disrupt a building’s financial planning. We work with dedicated tax certiorari experts to help our clients address these challenges directly and pursue reductions when the city’s assessments don’t reflect reality."
— Stephanie Cardello, Vice President, Compliance Department | FirstService Residential New York
How does the tax certiorari process work?
- Review your assessment
The DOF sends a Notice of Property Value (NOPV) each January. This notice provides the assessed value of your property.
- Consult an attorney
The deadline to file a protest application with the New York City Tax Commission to challenge a property assessment is March 1. An attorney specializing in tax certiorari proceedings should review your property’s assessment and help guide you through the necessary steps. Most tax certiorari attorneys work on a contingency basis, meaning they only earn a fee if they reduce your tax bill. The only cost a property owner will pay is a nominal filing fee, so even if the assessment seems reasonable, there is no risk in filing the protest
- Hearing and settlement
Eligible properties may be granted a hearing before the NYC Tax Commission, which reviews each case to determine if the assessment warrants a reduction. The Tax Commission can reduce assessments for the current year and one year prior. If the protest is successful, the process is usually completed after the property owner has started to pay taxes based on the original assessment on July 1. Successful cases may result in cash refunds, a reduced tax obligation for the rest of the fiscal year, and adjustments for the following four years.
- Extended challenges
If the protest at the Tax Commission is not successful, an attorney can preserve the board’s or building owner’s right to continue to protest through a civil action in which the City of New York is the defendant.
How to choose the right tax certiorari attorney
Tax protests are a specialized field, requiring deep expertise in real estate tax law and New York City regulations. Here are some things to consider when selecting an attorney to represent your building:- Dedicated tax certiorari experts
Look for a firm with a dedicated tax certiorari group. FirstService clients have access to the tax certiorari team at Goldberg Weprin Finkel Goldstein, a New York City-based real estate law firm that has helped our managed properties save millions on real estate tax assessments.
- Transparent and cost-effective fees
Tax certiorari attorneys usually work on a contingency basis, meaning they only earn a fee if they’re able to reduce your tax bill. These attorneys often charge higher fees, ranging from 12% to 20% of total tax savings, which can be a staggering amount for six or seven-digit assessment reductions.
To deliver additional value to our clients, FirstService Residential has negotiated a below-market fee structure with Goldberg Weprin through which our clients can obtain this legal service at rates that are significantly lower than fees generally charged by competing law firms.
- Commitment to ongoing guidance and support
The tax certiorari process can take years, and some firms fail to keep clients updated. As part of our commitment to provide value-added services to our clients, each property receives complimentary semi-annual reports on the status of the assessment and the efforts to obtain a reduction.
Client Success Stories: Real savings for board members like you
$450,000 Property Tax Abatement | Upper East Side CondoAfter a minimal reduction from the Tax Commission, a Manhattan property managed by FirstService retained Goldberg Weprin to facilitate its tax certiorari filings the following year. When the Tax Commission again offered a minimal reduction, Goldberg Weprin advised the board to reject the offer, and instead waited to argue for a larger reduction of the assessment as part of the next tax certiorari filing.
This time around, the board was awarded a 15% reduction of property tax assessments for the last two fiscal years. Unit owners saw immediate tax savings estimated at over $450,000.
$400,000 Property Tax Abatement | Upper West Side Condo
An Upper West Side property saw a 28% assessment increase over just two years. Goldberg Weprin obtained a reduction for both years, resulting in an increase of just 1.5%. The immediate tax savings to the unit owners are estimated at approximately $400,000.
$300,000 Property Tax Abatement | Brooklyn Co-op
A co-op in Brooklyn partnered with Goldberg Weprin and reduced their annual assessment by 50%, resulting in immediate savings of nearly $300,000. As a FirstService client, the co-op paid a discounted rate for Goldberg Weprin’s services, about 40% below industry standard rates for tax certiorari work.