Property taxes are a primary source of revenue for many local governments. They are also a significant expense for homeowners. Even after you have paid off your mortgage, property taxes remain. That is why it is important to understand your property tax bill. If you know how it is calculated, you will have an idea of what your bill should be each year, allowing you to budget accordingly, avoid surprises and spot any costly errors on your bill.

So how are property taxes calculated?

Your property tax bill is based on the assessed value of your property, any exemptions you qualify for and a property tax rate. People sometimes think that their municipality’s assessor sets property taxes. This is not true. The assessor’s role is only to determine what the market value is for your property using a market, cost, or income approach, depending on the type of property. Once the assessor has determined your market value, the assessor then calculates your assessed value, which is a simple mathematical calculation that multiplies the market value by a predetermined Uniform Percentage of Value (“UPV”) set by the State of New York. The UPV provides a standardized assessment calculation to ensure that every property receives an equitable assessment. So for example, if the UPV is 40%, and your market value is $500,000, your assessed value would be $200,000 ($500,000 multiplied by 40%).

What if you disagree with your assessment?

Once the assessor has determined the assessed value of all the properties in a municipality, he or she will publish what is referred to as the “tentative assessment roll,” which is a comprehensive listing of all properties, their determined market value, and their assessed value. For most municipalities in New York, the tentative assessment roll is published in the first week of May. If you disagree with your assessment you must file a complaint seeking an Administrative Review of your assessment by the deadline established by your municipality. The deadline is usually a few weeks after the tentative assessment roll is published – typically the fourth Tuesday of May and it is referred to as “Grievance Day.” This process is referred to as “grieving” your assessment. There is no cost to grieve an assessment and it does not require you to hire an attorney.

How do you file a complaint seeking Administrative Review of your assessment?

Outside of New York City and Nassau County, a grievant must use Form RP-524 entitled “Complaint on Real Property Assessment. You can find the form here https://www.tax.ny.gov/pdf/current_forms/orpts/rp524_fill_in.pdf. File the completed form and any supporting documents justifying your request with the assessor or the board of assessment review with your municipality. Please note if your property is located within a village that assesses property, you will have two assessments – one for the village and one for the town. If you wish to grieve both assessments you will need to complete and submit separate RP-524 forms to each municipality. Be sure to check with your municipality as to submission deadlines and the date of Grievance Day. In most municipalities the deadline is Grievance Day. If you do not file the RP-524 form by the deadline, you will lose the opportunity for an Administrative Review and a Judicial Review.

Who determines whether or not the relief requested should be granted?

Each municipality has a board of assessment review (“BAR”). The BAR is a quasi-judicial body charged with the judicial responsibility to hear grievances against the current assessment role, obtain the facts, and apply the law. The BAR consists of not less than three (3) and no more than five (5) members appointed by the municipality’s legislative body. Members must possess knowledge of property values in the municipality and initial appointees and reappointees must attend training sessions taught by a county director of real property tax services. Neither the assessor, nor any members of his or her staff, may be appointed to the BAR.

Who can grieve an assessment?

Any person who pays property taxes can grieve an assessment. This includes not only property owners, but also purchasers under contract to purchase the subject property, and tenants who are required to pay taxes pursuant to a lease or written agreement.

What if you do not reside in the municipality where the property is situate?

A non-resident owner can request a date after Grievance Day for the grievance hearing but must submit the RP-524 form on or before the regularly scheduled Grievance Day. Requests must be made to the assessor or BAR on or before Grievance Day and the BAR must set a date no later than twenty-one (21) days after Grievance Day for the hearing.

Can you grieve more than one year?

No. Only the assessment on the current tentative assessment roll can be grieved – you cannot grieve assessments from prior years.

Can the assessor reduce an assessment prior to Grievance Day?

Yes. On or prior to Grievance Day, a complainant and the assessor may stipulate to a reduced assessment of the value of the subject property. To do so, Part Six of the RP-524 form must be completed and signed. Note however if you enter into a stipulation, a complainant may not ask the BAR for a further reduction in your assessment. Further more, if the agreed upon reduced assessment appears on the final assessment roll, a complainant will not be permitted to seek an even lower assessment through the Judicial Review process (see below for explanation on Judicial Review).

Do you have to appear at the BAR hearing on Grievance Day?

No, but a complainant does have the right to attend the hearing and present statements and/or documentation in support of their grievance. A complainant may appear personally, with or without an attorney or other representative. If a complainant chooses to be represented by an attorney or other representative, they must authorize that person to appear on their behalf by signing Part Four of the RP-524 form. Note however the BAR may require a complainant or their representative to appear personally, or to submit additional evidence. If a complainant refuses the BAR’s request, the BAR can deny the complainant’s request for a reduction in assessment based on such refusal.

When do you find out whether or not your request has been granted?

A complainant will receive a written notice of the BAR’s determination (except where the BAR ratifies a stipulated assessment). The notice must contain a statement of the reasons for the BAR’s determination.

What if you do not receive the requested relief?

If a complainant is dissatisfied with the decision of the BAR, they may seek Judicial Review of the assessment via Small Claims Assessment Review (“SCAR”) in Small Claims Court or a Tax Certiorari proceeding. SCAR is only available to: property owners who live in their one, two or three family dwellings that are used exclusively for residential purposes or owners of vacant land that is not of sufficient size to contain a one, two or three family dwelling. For information on SCAR see the New York State Unified Court System website at https://www.nycourts.gov/litigants/scar/. Tax Certiorari proceedings are for all other scenarios and are commenced in NY Supreme Court pursuant to Article 7 of the Real Property Tax Law. It is highly recommended a complainant hire an attorney for a Tax Certiorari proceeding.

What is the deadline for Judicial Review of the BAR’s determination?

SCAR and Tax Certiorari proceedings must be initiated within thirty (30) days of the filing of the final assessment roll or notice of such filing, whichever is later.

In summary, the property tax grievance is not as complicated as most property owners believe. It only requires a little bit of research, completing the RP-524 form, and submitting same before the deadline.