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Queens Chronicle

Postpone property taxes until death

Senior homeowners will get to defer tax bite, awaiting mayor’s OK

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Posted: Thursday, January 31, 2019 10:30 am | Updated: 1:07 pm, Thu Feb 7, 2019.

Without fanfare or much opposition, the City Council last week passed a new bill that allows low-income, senior homeowners to put off paying property taxes for the rest of their lives.

The bill, now awaiting Mayor de Blasio’s signature, represents a sweeping change for city homeowners — for the first time, allowing qualified owners full tax deferral essentially until death.

The new bill will permit homeowners over 65 years old and earning less than $58,400 a year to apply for a property tax deferment. The deferral would allow them to pay just some — or even none — of their property taxes until they die or the house is sold.

The city then would collect the accumulated tax debt — without interest — when the house changes hands.

“It’s something the city has never done before,” said an aide to Councilman Daniel Dromm (D-Jackson Heights), who sponsored the bill.

The new tax deferral could be available to an estimated 17,000 homeowners in Queens, a spokesman for the City Council said.

As well, the new bill would allow low-income homeowners — regardless of age — to come up with tax payment plans based on their income for both current and past-due taxes.

The city already has an installment plan for people who are in tax arrears, Dromm pointed out during hearings on the bill

“But, the amount of each installment is calculated without regard to income or ability to pay,” he said. “As a result, many property owners cannot actually afford the payments and end up defaulting.”

Dromm cited statistics from the city that show nearly half of the people in installment agreements end up defaulting anyway.

The bill would change the system of tax payment for low-income homeowners by allowing them to pay based on a percentage of their incomes rather than the assessed value of their property.

Seniors would have the option of deferring some or all of their taxes. Low-income homeowners would have the choice of paying between 2 and 8 percent of their incomes toward current or past-due taxes.

The mayor has not said yet if he will sign the groundbreaking new bill into law but a City Hall spokeswoman, in an email to the Chronicle, indicated he is supportive.

“This bill recognizes that hardships exist for vulnerable New Yorkers and offers a path for them to stay in the neighborhoods they call home,” she said.

The new program, if it becomes law, will be rolled out by the Department of Finance sometime this spring, Dromm said.

Generallly the city can place a tax lien on a homeowner who is more than $1,000 in arrears for more than three years.

The debt is auctioned off to the highest bidder at the annual lien sale, usually in May.

The new debt owner then has the right to collect the back taxes — with interest and fees tacked on. Eventually, the debt holder can go to court and foreclose on the homeowner for failure to pay.

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  • migwar posted at 10:12 pm on Thu, Jan 31, 2019.

    migwar Posts: 6

    This is a sensible plan, but I would be interested to know whether Social Security retirement benefits count as "earned income," (which they do for federal tax purposes.) My pension keeps me under the threshold amount, but my Social Security benefit pushes me over it. Even with the Social Security benefit included, my property tax exceeds 8% of my income, so I think the bill would be more fair if those Seniors with higher incomes were able to cap their property taxes at 8% of income and/or were able to defer those taxes until vacating the home (via sale of home, deeding it to descendants, or death.)

  • stan chaz posted at 4:13 pm on Thu, Jan 31, 2019.

    stan chaz Posts: 17

    Conservatives believe that government is somehow a basically evil concept, to be drowned in a bathtub as their famous phrase goes (witness their recent callous government shutdown). As is happening in Washington today, they would drag us back to a regulation-free & lawless free-market jungle, a jungle where lobbyists rule, and the only thing "free" is the freedom with which ordinary people are exploited. This, while Progressives deeply believe in the potential of government to lift people up, and to represent and respond to both their aspirations and their needs - such as with this welcome common-sense measure proposed by our city's progressive leadership.

    Edited by staff.