Property Tax Grievance May Be the Answer to SALT Woes

Thinking about challenging your tax assessment this year? Many homeowners who have taken a hit as a result of changes in federal tax laws that limit the deduction for state and local property taxes, are looking for a way to recoup their losses.

Kevin E. Staudt is a Senior Associate with McCullough, Goldberger & Staudt LLP. He handles the firm’s tax litigation practice and has developed is experienced in working with local assessors and municipal attorneys to achieve successful outcomes in tax refund cases.

Staudt said that residential property owners might be able to offset the loss of deductibility by filing for a reduction in their property taxes.

Real Estate experts say that the cap on federal income tax deductibility of state and local taxes (SALT) continues to undercut the upper end of the real estate market, especially for luxury single-family homes. According to Houlihan Lawrence’s 2nd Quarter Report, the number of luxury homes sold north of New York City continues to decline as a consequence of tax reform. In Westchester County, Q2-2019 marked the third consecutive quarter decline in luxury home sales ($2M and higher). From October 1, 2018 through June 30, 2019, the number of homes sold dropped by 28 percent compared to the previous time period. 

A second-quarter market report by The Better Homes and Gardens Rand Realty found similar results in Westchester with sales of single-family homes remaining at 1,496 for the second quarter, down from the 1,551 sold in the second quarter of 2018. The average selling price also declined, down 4 percent at $885,701. The median selling price dropped 1.1 percent from 2018’s second quarter, coming in at $705,000.

Each year when cities, towns and villages publish their tentative assessment rolls, commercial, industrial and single or multi-family residential property owners weigh whether or not to file tax grievances with their municipality’s Board of Assessment Review. Staudt said there is little reason for a property owner not to investigate grieving their taxes since the investment is low and the probability of returns is reasonably high. Reductions of a property’s assessment are fairly common.  However, given the complex factors, the multiple dates for filing and new laws which may affect property values and grievance procedures, taxpayers who are considering filing should get professional help.  For more information, Contact Kevin Staudt at kstaudt@mgslawyers.com or call 914-949-6400.