New York City’s commercial real estate market has suffered numerous blows in recent years, but its tax revenue is breaking records.
The city’s real estate-related tax revenue increased to $37 billion last year, the New York Post reported, representing an all-time high. It’s on track to surge much higher this fiscal year to $50 billion, according to data compiled by the Real Estate Board of New York. Commercial real estate is the main driver, accounting for 82 percent of property tax revenue generated in the city.
“Through the pandemic, changing workplace trends and volatile macroeconomic pressures, the real estate sector continues to be the backbone of New York City’s economy and revenue base,” REBNY president James Whelan told the Post.
Real estate-related tax revenue was the top source of municipal tax revenue last year, accounting for nearly 50 percent of that total. Percentage-wise, that’s a slight dip from the previous fiscal year.
Nevertheless, real estate-related taxes continue to surge in the city. Since 2010, such taxes have increased by 100 percent. Over that same period, the city budget only increased by 89 percent.
The tax revenue generated through the real estate industry last year was enough to pay the total wages and salaries of 280,000 municipal workers, such as transit employees or police officers. Approximately $5 billion in transfer taxes went towards the MTA’s Capital Lockbox, a fund earmarked for MTA capital projects.
Property taxes are the largest revenue source for the city’s police, fire and sanitation services.
The overall tax-assessed value of the city’s properties increased by $2.5 billion over four years, according to a state comptroller report released last summer, hitting $204.8 billion.
Unfortunately for office owners, tax-assessed values don’t necessarily reflect actual sales values.
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