About Property Taxes in Sullivan County, New York
Property taxes in Sullivan County can be very confusing to new buyers. If you're from New York City, they can seem high, and there seems to be wide variations between townships, and even between similar houses within townships.
Please keep in mind that the following information is not "definitive". The property tax system, particularly the assessment process, in New York State is very complex. When I talk to assessors in different townships, I get slightly different answers. So take this overview of the property tax process with a grain of salt nothing is written in stone. But it should give you some idea of the how and why of property taxes here.
What are the property tax rates in Sullivan County?
Property taxes here consist of two major components, the "property" tax itself (which includes county and township taxes, plus levies for the volunteer fire department, ambulance service, solid waste disposal and libraries) and the school tax for the school district in which the property is located. Added together, the tax rate varies from a low of about $25.00 per thousand of assessed value to a high of about $65.00 per thousand of assessed value. Generally, taxes in the county run $35.00 to $40.00 per thousand of assessed value in much of the county.
What is the assessed value of the property for tax purposes?
Each township or village has a tax assessor who sets an assessed value for each property in the township or village. Under New York State law, properties must be assessed relative to similar, comparable properties. That means that a 3 bedroom, 2 bath ranch house on 5 acres of similar age and condition in any given township should have roughly the same assessed value. While within a given taxing authority it should be similar, the assessed value can vary widely for similar properties in different townships. For example, that 3 bedroom, 2 bath ranch house might be assessed at $130,000 in Fremont township, but $180,000 in Bethel township, resulting in widely varying taxes.
Adding to the complexity is something called the "equalization rate". One township may assess at close to full market value, while others may assess at a percentage below market value. Only a portion of property taxes are levied exclusively by the township. Most components that go into your property tax bill are allocated to taxing entities (like the county, a library district or an ambulance district) that may cross lines between townships that may set assessments at different percentages of market value. The "equalization rate" theoretically balances out those differences.
It's important to understand the relatioship between the assessed value and market value. A house located in a township may be assessed at, say, $130,000. But if that township has an equalization rate of 50%, the asessor has based the assessment on a "market value" of $260,000. Equalization rates for Sullivan County townships and villages can be found on the state's MuniPro website.
What contributes to a higher assessed value?
The biggest factor is the house itself, namely square footage and number of bedrooms and baths (heated, above grade square feet). Bigger houses with more bedrooms and baths are assessed higher than smaller houses with fewer bedrooms and baths. Then comes secondary building factors, like porches, decks, garages and finished basements. Age and condition of house comes into play, along with acreage and setting. Lake frontage adds a huge amount to the land portion of the valuation. Interior "fit and finish" often isn't a major factor. But if you undertake major renovations, even without increasing the footprint of the house, you've likely increased the market value and the assessor may have cause to increase your assessment above other similar sized houses.
When I buy a house for more than its assessed value, will the taxes go up?
First, you need to translate the assessed value into the "market value" that the assessor has placed on the property. (See above.) If you find out you've paid more than the assessor's estimate of "market value" for the house, your taxes won't necessarily go up upon sale. Tax assessors are not supposed to do "spot" reassessments on a single property with one major exception. If it is apparent that there has been a material change to the property (e.g. a basement was finished into living space, or a garage or swimming pool was added) that is not reflected in the assessors' tax record, they can reassess the property to reflect those changes which increase value. Generally, however, the assessment will not substantially change when you purchase a property. For example, if you pay $250,000 for that ranch house in Bethel with an assessor's market valuation of $150,000, the house must still be equitably compared to other similar houses so if the Bethel tax assessor raises your assessment to $250,000 (which is the fair market value of the house, since you paid that amount), they would technically be required to increase the assessment on other similar houses to that amount.
When I buy a house for less than its assessed value, will the taxes go down?
In a market experiencing price declines, buyng a house for less than it's assessed market value is becoming more common. What's happening in these circumstances ins't totally clear. I've heard that some township assessors have made assessment reductions on closing, but that policy doesn't appear to be universal. More likely, if your assessment is higher than the purchase price of the property, you'll have to grieve your assessment during the annual tax grievance period. (You apply for an assessment reduction in late April or early May. The day set aside for actual grievance hearings is usually the 4th Tuesday in May. You should talk with your township tax assessor by late March to find out the specific process and get the necessary forms.)
Note that if you paid less than the assessor's market value for a house, it isn't a slam dunk that your assessment will be reduced to that level. Other sales of similar houses in the township within the previous 12 months will also be taken into consideration. So, if you bought a 2 bedroom ranch house in Bethel in June for $150,000, but there were three other sales of similar houses during the 12 months leading up to the taxable status date of $175,000, $190,000 and $210,000, the assessor will take all 4 sales into account when determining market value.
What about township-wide reassessments?
Periodically townships conduct a township wide reassessment. The purpose, at least in theory, is to bring disparate assessments back into balance, reflecting current market values. During a township wide reassessment, some assessments go up and some go down. There are always a lot of very vocal unhappy people, those who have stayed under the radar with an assessment way below market value and now find they've been adjusted up to market value. There are always some happy people, as well, who find their valuations cut, but they tend to not be so vocal.
If a client of mine is buying a house with an assessed market value below their purchase price, I advise them to be financially prepared to pay property taxes on the full price of their house, even though they most likely won't be required to do so.
Why are taxes in Sullivan County so "high"?
There are 3 primary factors that contribute to relatively high residential property taxes here low density, relatively low property values and a small commcerial tax base. The biggest contributor is low density; what makes Sullivan County so attractive for a second home getaway is also what pushes up property taxes. In New York City, there can be thousands of tax paying housing 'units' in a square mile. Here, there may be only a few dozen tax paying housing 'units' in a square mile. There are still roads to maintain and plow and services to provide, but the cost of those services is spread out over a much smaller tax base.
Second, property values here are relatively low compared to New York City and its suburbs. Our average sales price here is about $160,000, and the average assessed value of the entire housing stock here is less than that. So the rate per thousand is higher. In Westchester County, you may only be paying $15.00 per thousand, but there are a lot more houses, and they have a lot higher assessed values.
Finally, Sullivan County is primarily rural. We don't have a large commercial base and few large corporate taxpayers. Those big office buildings, factories and warehouses close to the city bear a huge amount of the tax burden, reducing the tax burden on individual residential homeowners. Also, here in Sullivan County, a lot of our land is taxed at lower "agricultural" rates or is in the forestry protection program, with substantial tax abatements. When you're driving through Sullivan County enjoying the beautiful and relatively unspoiled vistas, they comes at a cost those pastoral farmlands and unspoiled woodlands are only economically viable because they're taxed at lower rates.
Aren't taxes high in Sullivan County because of all the non-profits that own property here?
This is a popular misconception, and one that is frequently used to "justify" negative perceptions of certain religious groups. In reality, Sullivan County has less property "off the tax rolls" due to non-profit ownerships than most other New York counties.. However, there are some areas of the county where it is a more significant factor.
But non-profits aren't the only property owners that get tax breaks that lower the overall tax base. Many people love the farms throughout Sullivan County, but most of those farms receive agricultural exemptions on the portion of those taxes. Owners with forest land can also receive a forestry exemption if they actively manage their forest land. So, taken all together, there is quite a bit of property that doesn't pay full freight.
Property tax information for Sullivan County is available at www.taxlookup.net. But you need to be careful to make sure you're getting the correct total tax picture. Here are some important tips. First, remember that there are 2 or 3 taxing entities for every property in Sullivan County. You need to check the taxes for both the township and the school district. If a property is located in a village (Liberty, Monticello, Bloomingburg), you also need to pull the village taxes. You need to add those two or three numbers together to get the total taxes.
You also need to check the "Levy Details" on the township portion of the tax bill to see if there is a "School relevy" included in the tax amount. If a property owner doesn't pay their September school taxes before the end of the year, they are rolled into the county taxes for the January tax bill. That can result in a deceptively high town/copunty tax bill (and is one of the reasons that Zillow's tax calculations can be way off base.) On the school portion of the tax site, you want to check "Property details" to see if there is a STAR exemption on the school taxes. (The STAR exemtion is only available to you if the property is your primary residence.) If there is an exemption, and you won't qualify for that exemption, you need to use the taxes as listed under "Tax Before Star."