We already know that renters in NYC find themselves in a uniquely tough position: Here at Brick, we previously wrote about how, on average, locals are devoting 65.2 percent of their income to paying the rent, more than double the recommended 30 percent.
Now, a new study from WalletHub reveals that homeowners could be feeling the cost of living crunch, too. The website looked at property tax rates across the U.S. by dividing median tax payment by median home price, and gave each state a ranking. Nationwide, the average American household spends $2,149 on property taxes annually; New Yorkers, meanwhile, spend $2,899, which puts the state in 41st place.
That number doesn't paint a complete picture, however. First, the rate is based on payments for a home worth $178,600, which is the median home value for the United States, but certainly not for NYC. (Here, according to Zillow, it's a much steeper $631,300.)
Furthermore, the rates WalletHub provides are statewide averages, but property tax rates can vary significantly by county. In NYC, for instance, the rate is substantially lower than those of neighboring counties. According to Smart Asset, the city's rate is about 0.72 percent, well below the state average of 1.5 percent, and definitely an improvement over Nassau County, where the rate is 2.13 percent, and Westchester, where it's 1.93 percent.
Why are NYC property tax rates so much lower than those of nearby counties? An article in the New York Post explains that the city's method for calculating those rates may be "out of whack," because it assesses the market value of co-ops and condos, which is then used to calculate the tax rate, by looking at the income-per-square-foot earned by neighboring rental apartments.
The data blog Metrocosm explores why this is a problem, noting that the rental buildings nearest to the city's most high-end luxury condos don't measure up in value by a long shot, which means those condos end up being undervalued, and taxed for much less than they're worth.
Outside the city, meanwhile suburban homeowners don't get off so easy. Newsday reported that the NYC suburbs—including Westchester, Nassau, Rockland, Bergen, and Essex Counties—have the highest property taxes in the country. In fact, WalletHub ranks New Jersey at the very bottom of their list, with a rate of 2.35 percent.
The takeaway here may be that ditching NYC for the burbs, especially the Jersey burbs, could mean less of a reduction in housing costs than you might expect.
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