New York, NY – August 19, 2008 – (RealEstateRama) — Taking strong action to address a flagging state economy and impending budget deficits, Assembly Speaker Sheldon Silver, Assembly Ways and Means Committee Chair Herman D. Farrell and Assembly Committee on Real Property Taxation Chair Sandra Galef announced today that the Assembly passed legislation capping the amount of property taxes to be paid by working families and seniors based on income (A.11838).
The Assembly measure, which provides $1.7 billion in property tax relief for working families, will also raise $1 billion in revenues to address looming deficits. The legislation will increase slightly the tax rate on the wealthiest one percent of wage earners in the state – those making more than $1 million or more each year. More than 40 percent of this income group resides outside of New York.
The “circuit breaker” measure adopted by the Assembly today guarantees that those who face the greatest challenges of rising property taxes-including working families and seniors living on fixed incomes-receive an immediate tax reduction. The Assembly’s tax proposal is based on all property taxes and the rent working families pay.
“The real property tax relief plan passed today, know as the circuit breaker, will deliver true income-based tax relief to New Yorkers who rent their homes or own a house, co-op or condominium,” Silver (D-Manhattan) said. “This legislation offers much-needed relief to working families already struggling with rising fuel and food prices and other increasing costs.”
“The Assembly understands the importance of providing property tax relief in a fair, equitable and practical manner,” said Farrell (D-Manhattan). “Today, we do just that by reducing the burden on property owners, many of whom are challenged by the nation’s tough economic condition. The circuit breaker modestly increases taxes on those who can most afford it, while providing property tax reductions for those who most need it most.”
“The Assembly plan passed today will provide property tax relief to more than half of the households statewide while still allowing for our school districts to function efficiently,” said Galef (D-Ossining). “We encourage Governor Paterson and the Senate to adopt our model, which balances the real concerns of homeowners with the needs of our school children.”
Under the Assembly plan:
- Up to 90 percent of the property tax relief would go to homeowners earning less than $90,000 a year.
- Sixty percent of this group earns less than $50,000 a year.
- Households with incomes below $90,000 and pay property taxes over five percent of their gross income would receive a 25 percent refundable credit for property taxes that exceed five percent of their gross income.
- Taxpayers with household incomes between $90,000 and $125,000 would receive a 20 percent refundable credit for any property taxes over six percent of their gross income.
- Those earning between $125,000 and $250,000 would receive a 15 percent refundable credit for any property taxes over seven percent of their gross income.
- The average household benefit under the Assembly property tax relief plan will be $734.
- The average renter benefit will be $250.
The Assembly plan is the only property tax relief plan that provides immediate relief to working families.
As a responsible means of providing tax relief, the Assembly legislation includes a personal income tax increase from 6.85 percent to 7.85 percent for annual incomes over $1 million. For those earning more than $5 million, the rate would rise to 8.6 percent.
