City’s reliance on property taxes grows despite pandemic struggles in sector: report
And the importance of property taxes is unlikely to change in the future. Industry tax revenue is expected to increase by $1 billion in fiscal year 2023, which runs from July 2022 to June 2023. This should help offset projected declines in personal income tax revenue. and corporate taxes, the report says. Although real estate transfer taxes are expected to decline that year, property assessments will likely rise, according to REBNY.
“This report is another reminder that the health of the real estate sector and the city’s finances and economy are inextricably linked,” REBNY Chairman James Whelan said in a statement.
Real estate-related taxes are expected to account for more than $35 billion in the city’s enacted fiscal year 2023 budget, compared to $30 billion from all other tax sources, according to REBNY. They are expected to be $34.2 billion for fiscal year 2022.
The city estimated in its preliminary budget earlier this year that commercial buildings had retained about 92% of their value despite the pandemic and were worth about $301 billion in total for the 2022/2023 fiscal years. The Department of Finance estimated the total value of all properties in the city at about $1.4 trillion for fiscal year 2023, up 8.2% from the previous fiscal year.