NYC property tax reform could be a huge challenge

NEW YORK (FOX5NY.COM) - At the end of May, Mayor Bill de Blasio announced the creation of a new advisory commission to change the city's property tax system. It would make it easier to understand, fairer and simpler without taking away money from the city services.

Fox 5 reached out to the commission but members declined our request for an interview saying they're still focusing on getting organized.

Warburg Realty CEO Frederick Peters has been in the real estate business for 40 years. While he agrees the tax system needs to be simplified and fairer, he said overhauling it won't be easy. He broke down the city's current property tax system and explained the issues the new commission will likely face in each of the three categories it is trying to reform.

Category 1: One- to three-family homes, which, when those homes are reassessed, can only go up to 6 percent a year to a maximum of 20 percent over five years.

"Homeowners who are going to be extremely defensive about maintaining their advantageous position," Peters said.

Category 2: Cooperative, condominium, and rental buildings.

"Owners who are both going to want to maintain their position relative to commercial and at the same time improve their position relative to the one- to three-family homeowners," Peters said.

And Category 3: Commercial buildings.

"Who are going to want tax relief given to them as commercial owners and owners of rental buildings versus the people who actually reside in their homes," Peters said.

By state law, property taxes make up 45 percent of the city's tax dollars.

"I think this is going to be an extremely challenging assignment," Peters said.

And like Peters said, good luck to the commission.