With Property Taxes At All Time High, Legislation Would Save NYC Homeowners Approximately $210 Million Annually
New York, NY – February 14, 2011 – (RealEstateRama) — U.S. Senator Kirsten Gillibrand, joined by a Staten Island family struggling with high property taxes and the financial difficulties of raising a child with special needs, today announced that the first piece of legislation she is introducing in the 112th Congress is a bill to provide property tax relief for 1.1 million New York homeowners, including nearly 300,000 in New York City. Senator Gillibrand’s legislation would enable all New Yorkers that pay property taxes to deduct the full amount of money they pay from their federal income taxes. Currently, only homeowners that itemize their federal taxes can deduct the cost of property taxes.
In 2010, property taxes across the city increased by an average of 4.9% for single family homes and 3.5% for condo owners, adding to an increasing financial burden on many families across the five boroughs. The Homeowner Tax Fairness Act would allow property taxes to become fully deductable for all individuals whether they itemize deductions or not, providing additional tax relief for up to 30 million Americans nationwide. An estimated 290,000 New York City homeowners would save approximately a combined $210 million annually under the new legislation. Approximately 1.1 million homeowners across the state would save an estimated $1 billion annually under Senator Gillibrand’s legislation.
“I know how hard families and seniors are struggling with the rising cost of property taxes,” Senator Gillibrand said. “Property taxes in nearly every part of New York are putting a financial strain on many families. We need to provide these families with some relief by allowing all homeowners, even those who don’t itemize deductions on their tax returns, to deduct the full cost of their property taxes. This is not a Democratic idea or a Republican idea – it is a good idea and we have to get it done this year.”
John and Amy Lavelle from Staten Island said, “During these tough economic times, property tax costs are becoming a burden that’s making it harder and harder to get by. The hundreds of dollars we could save in tax relief would go a long way towards paying our bills, child care costs and medical expenses. Senator Gillibrand’s legislation will provide much needed relief for our family and so many working middle class New Yorkers.”
Making Property Taxes Fully Deductible for All Taxpayers
Senator Gillibrand’s Homeowner Tax Fairness Act would expand and make permanent federal property tax relief for individuals who do not itemize their federal tax deductions. Filers who do not itemize their taxes would be able to deduct the full amount of their property taxes. On average, only about one-third of taxpayers itemize their deductions.
According to calculations based on data from the Tax Foundation and the U.S. Census, approximately 290,000 New York City homeowners do not itemize their taxes and therefore currently cannot deduct their property taxes. These New Yorkers would benefit from Senator Gillibrand’s legislation and save approximately a combined $210 million on their federal taxes.
For the average property tax paying family in the city earning under $68,000 that does not itemize their deductions, they would save an estimated $455 annually. For a family earning $90,000, they would save an estimated $758 annually.
Before 2008, only taxpayers who itemized their deductions could claim a deduction for state and local property taxes. Congress temporarily allowed non-itemizing taxpayers to deduct their property taxes in 2008 in an effort to help alleviate the housing crisis. However, this deduction was capped at just $500 and expired at the end of 2009. Senator Gillibrand’s legislation would allow all filers to deduct the full amount of their property taxes and make this property tax relief permanent.
The benefit of this legislation to homeowners would vary according to individual home values and tax rates.
