New York Property Tax Legislation May be Pre-Cursor to National Reforms

A new bill passed in the New York State Senate could be the key to easing the burden for New York City taxpayers and could be a model for other states to follow in the future.

Tax reform will likely be a high-priority piece of legislation after a new president is elected. This could mean changes to property tax rates and mortgage interest deduction.

The bill, which has now been sent to assembly, would provide tax relief to residents and businesses in New York City by creating a property tax cap that would save taxpayers $4.5 billion by 2019.

It was sponsored by Senator Andrew Lanza (R-C-I, Staten Island) and "limits future tax increases to provide real savings to taxpayers that would create jobs by lowering the cost of doing business, encourage affordable and supportive housing construction, and give more financial security to small businesses and residents on fixed incomes," according to a release from the New York State Senate.

“The cost of living for middle class homeowners is too high as a result of property taxes and a myriad of other taxes and fees imposed upon them by New York City," Lanza noted. "The five boroughs are tapped out. This legislation will put an end to out of control tax increases that are being forced upon us. New York City government needs to live within its means in the same way families are forced to do.”

Speaker of the House Paul Ryan has also named tax reform as one of his top priorities in his new position. According to Politico, Ryan recently said in a speech that voters “look at Washington and all they see is chaos—what a relief to them it would be if we finally got our acts together. How reassuring it would be if we actually fixed the tax code, put patients in charge of their health care, grew our economy, strengthened our military, lifted people out of poverty and paid down our debt. The cynics will scoff—they’ll say it’s not possible. You better believe we’re going to try.”

The homeownership rate increased marginally over the last two quarters, but was fairly unchanged year-over-year, especially compared to the all-time high in 2004, the U.S. Census Bureau reported. This has left many in the industry questioning if homeownership has bottomed out.

"Today's Census Homeownership and Vacancy Survey release also provides optimism that the homeownership rate may have hit bottom in 2015," said Ralph B. McLaughlin, Chief Economist at Trulia. "Many Gen Xers lost their homes during the recession, so this is a positive sign that we may be seeing boomerang buyers coming back into housing market. However, the increase was not statistically significant from a year ago."