Owning a Home Near NYC Already Costs a Ton—and It Might Get Worse
Owning a Home Near NYC Already Costs a Ton—and It Might Get Worse
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Suddenly, renting doesn’t sound so bad.
Nine of the top 10 priciest counties for real-estate taxes last year are within commuting distance of New York City, a new analysis has found.
Topping the list is Westchester, where the average 2017 property-tax bill for a single-family home was $17,179—well above the new $10,000 cap on federal income-tax deductions for state and local levies.
Rockland, Essex, Bergen and Nassau counties round out the top five—all with average 2017 bills above $10,000.
The only top-10 county outside the New York metropolitan area is California’s tony Marin County near San Francisco.
All 10 were well above the national average of $3,399—due in part to higher tax rates, but also to stronger home values.
New York City’s outer boroughs fared much better in the rankings than their suburban counterparts.
Brooklyn ranked 83rd with an average single-family-home tax bill of $5,734. Queens was 93rd at $5,589, Staten Island 148th at $4,604 and The Bronx 161st at $4,360.
Manhattan was not ranked because the study looked at only those counties with 10,000 or more single-family homes.
“The new income-tax guidelines are just another blow to these high-tax areas,” said Daren Blomquist of ATTOM Data Solutions, which ranked 1,414 US counties with 10,000 or more single-family homes.
“For those housing markets, it’s a disincentive for home ownership, which could weaken demand for homes—at least on the high end—and could cause some softening of the housing market there.”
Previously, Westchester homeowners could write off their real-estate tax bills when filing their federal returns, lowering their taxable income and thus reducing the amount owed to Uncle Sam in April.
But the tax-reform bill President Trump signed into law in late December caps State And Local Tax deductions—sometimes referred to as SALT—at $10,000.
It’s tough to predict how the new rules will impact median home prices down the road, but Blomquist believes the end result will be “a Jekyll-and-Hyde type of market” where demand will skyrocket for homes with property-tax bills below the $10,000 threshold while the market weakens for pricier pads.
Higher-income folks may be willing to eat the difference, he said, adding that the New York area is particularly tough to predict because of the concentration of wealth by local and foreign real-estate interests.
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