The Town of Liberty (which covers a much larger area than the Village of Liberty) encompasses some beautiful country areas with some of the most affordable properties in the county. But those properties can be very tough sells because of jaw droppingly high property taxes that are often 5% of market value (compared to about 2.75% to 3.25% in most of the rest of Sullivan County.) For example, right now there's a house on the market on Old Loomis Road with an asking price of $235,000 (with the Fair Market Value pegged by the town assessor at $203,000) with property taxes (combined town/county and school) of $10,361! If the house sold at $200,000 with a conventional 80% mortgage at 4.5%, the property taxes ($863 per month) would be higher than the mortgage payment ($811.)
Something's out of whack, and that 'out of whack' is school taxes. Most of the properties in the Town of Liberty are also in the Liberty school district. In the case of the example above, the town/county taxes are $3970 per year, while the school taxes are $6391, 61% higher than the town'county taxes. In most other parts of Sullivan, the town/county and school portions of the total tax hit are roughly equal.
How did this come about? The main reason is the Village of Liberty, or more specifically, the very, very low house prices in the village. In 2013, according to sales reported in the Sullivan MLS, the average sale price for a single family home in the Village of Liberty was $66,370. Since I've been selling real estate here, houses in the Village of Liberty have generally sold at a 'discount' to houses elsewhere because of the added burden of village taxes. But over the past few years, that gap may have grown because parts of the village have fallen on harder times, and so houses have been a tougher sell there.
Regardless of the reasons, houses in the village have relatively low assessments. They may be assessed correctly, but with low comparative sales prices, the assessments are low. Prices outside the village are typically higher, and therefore the assessments are higher.
When it comes time for the Liberty school district to set the tax rate (or levy), the assessed values for all of the properties in the district, both within the village and outside of the village, are added up to come up with the tax roll. That's divided into the budget to come up with the levy, which in the case of the LIberty school district, pencilled out to 3.1% of FMV (fair market value). (In the Sullivan West school district, by comparison, the levy is 1.6% of FMV.)
Can something be done about it? Sure, but there isn't the political will to do it. Over the years there have been pushes to dissolve the Village of Liberty (with its police force and municipal services) and merge it into the Town of Liberty. That would cut out those high village taxes, which in the long run would make in-village houses more saleable (and likely result in somewhat higher prices.) School districts could merge into larger, consolidated districts. The Cuomo administration has been making a major push for this around the state, but again there's no political will to do it. Consolidated school districts would reduce costs. But more importantly in the case of Liberty, the impact of the low property values in the village of Liberty would be spread over a much larger base, and likely result in a lower school levy.
Charlie Barbuti, the supervisor for the Town of Liberty, was able to push through a tax abatement program last year that will provide a 5 year tax abatement for newly constructed residential properties in the town. It's sliding, with a 50% abatement in the first year, then 40, 30, 20 and 10 in years 2, 3 4 and 5. The abatement will apply to town, village and school taxes. It sounds great on paper, but doesn't deal with the underlying systemic issues. At the end of 5 years, the buyer of that $200,000 new home will still be hit with a $10,000 tax bill (less the STAR reduction for primary homeowners.)
There is an upside for buyers in all of this. Because of higher taxes, houses in the Town of Liberty/Liberty schools tax jurisdiction routinely sell for less (and sometimes much less) than their counterparts in lower tax jurisdictions. So buyers can grab some great deals.