Scarsdale Forum Committee Recommends Adoption of Homestead Tax Raising Taxes for Condo Owners

The Scarsdale Forum's Committee on Assessment and Revaluation has come out in favor of "The Homestead Tax Option," which would triple real estate taxes for those living in the Christie Place Condominiums on Christie Place in Scarsdale. Currently these units are taxed based on their estimated rental income, rather than their assessed value. That means that a condominium unit owner in Christie Place with a market value of $1.5mm pays approximately $11,500 in real estate taxes, while a homeowner of a single family home of that same value could pay upwards of $30,000 per year.

Because the Village is currently undergoing a Village-wide revaluation, Scarsdale has the option of adopting the "Homestead Tax Option " in conjunction with the revaluation. It is estimated that the increase for Christie Place homeowners would be $928,000 in revenue annually. The increase for condo owners would mean a savings of about $160 per year, per household for owners of single-family homes in the Village.

However, residents who purchased the units in Christie Place between 2008 and 2011 were not told that their taxes could triple just a few years after they made their purchase. The units were earmarked for seniors, age 55 and up, most of whom do not have children in the Scarsdale Schools. Many of the buyers were empty nesters who purchased the units because it was a more economical way to retire in Scarsdale than to remain in their homes.

The Forum Committee calls the current valuation method a tax loophole and "concluded that the fundamental need to treat all property owners the same way in valuing their properties, to the extent allowable under the law, requires the Village Board and Board of Education to adopt the Homestead Tax."

The option would first need to be considered by the Scardsale Village Board of Trustees and if passed would go before the Scarsdale Board of Education.

However, all members of the committee were not in agreement. Doug Ulene, a 13-year resident of Scarsdale, resigned from the Forum's Assessment and Revaluation Committee because of its position on this issue, and sent us the following letter:

(From Doug Ulene:) I don't have a dog in this fight, but I strongly disagree with the 200% property tax increase that the Scarsdale Forum's Assessment Revaluation Committee recommends for residential condo units in Christie Place.

Although the committee's report speaks of "what is fair and right for all the property owners in Scarsdale," and "ensuring that property taxes in Scarsdale are equitably distributed," the committee's conclusion is, essentially, "equality über alles" - triple the property taxes on 42 condominium units, regardless of the expectations of, and the impact on, the affected residents.

Is that "fair"? Is that "right"? Is a targeted change in the manner of assessment on 42 condominium units, in a community with almost 6,000 tax lots, "equitable"? These are questions that should have been asked, and answered, three years ago as part of the Village Board's deliberations concerning the village-wide reassessment. They weren't.

Moreover, the possibility of tripling property taxes at Christie Place was never discussed with Ginsburg Development Companies, the Village's partner in the public/private redevelopment of this site. Adoption of the Homestead Tax Option solely "to eliminate the unfair preferential tax treatment provided to certain condominium units" is little more than the Village unilaterally re-trading its business deal. Such institutional bullying is just plain wrong. It reflects poorly on our community, and it sends a terrible message to the Village's counterparties.

Finally, the Scarsdale Forum's November 2010 report on reassessment - to which I was a signatory - does not include a single reference to "condo" or "homestead." Notwithstanding that omission, the Forum's committee now believes that purchasers of Christie Place condominiums should have researched New York State's Real Property Tax Law before they signed a contract. This belief ignores the reality of residential real estate transactions, and it imposes a burden on individuals that the Forum's committee ignored when it wrote a 22-page report on this topic.

I also take issue with the committee's contention that "There is no principled basis to benefit or subsidize the Christie Place owners over any other group or individual residents..." The signatories to the report have, apparently, forgotten a very important principle - the Golden Rule. If this is how Scarsdale residents plan to treat one another going forward, perhaps we should be more concerned about the values of our community, as opposed to the assessed values of our properties.

I understand that the Village's current tax policy costs my family an extra $160 per year. I am not willing to compromise my principles for that sum – or any other amount, for that matter. I hope others feel the same way.

Below find a information on the Forum's Committee Report that was submitted to Scarsdale10583 by Committee Chair Robert Berg.

Because of the short window in which the Village Board and the Board of Education must act, this Report is being issued under the Forum's Expedited Procedure Treatment. This means that the members of the Forum have not had an opportunity to weigh in or otherwise vote on the Report which will be presented to the General Membership at the Forum's next regularly scheduled meeting on February 6, 2014 at 8:00 p.m. in the Scott Room at the Scarsdale Public Library. All are welcome and encouraged to attend

Preamble to the Report

The Scarsdale Forum's Committee on Assessment and Revaluation is pleased to present to you with its Report recommending that the Village Board of Trustees and the Board of Education adopt the Homestead Tax Option in connection with the completion of the town wide revaluation project this Spring. As you know, the Village Board and the Board of Education held a public joint meeting to address this issue on December 2, 2013. Because of the importance of this issue, the Scarsdale Forum's Committee on Assessment and Revaluation convened and studied the issue. The Committee concluded that the fundamental need to treat all property owners the same way in valuing their properties, to the extent allowable under the law, requires the Village Board and Board of Education to adopt the Homestead Tax Option as soon as possible after the necessary public hearings have been held. Adoption of the Homestead Tax Option will largely diminish the unfair property tax preference afforded to the 42 condominium units in the Christie Place complex. Under current law, the Christie Place condominiums are valued for property tax assessment purposes using the rental income approach, rather than the comparable sales method which applies to nearly all of the residential properties (single family homes) in Scarsdale. Implementation of the Homestead Tax Option will mean that the Christie Place units are valued using the comparable sales method in this revaluation and in the future. A Christie Place unit presently pays only about 1/3 of the property taxes of a comparably priced single family residence. The Homestead Tax Option will eliminate this tax loophole with respect to the Village and School District components of Christie Place residents' property tax bills. The attached report explains the present tax advantage, explores how the Homestead Tax Option eradicates this unjustified advantage, and presents the recommendation that the Homestead Tax Option be implemented to assure the equitable distribution of the property tax burden as best as can be done under the Real Property Tax Law. As the public generally, and the Christie Place unit owners in particular, become aware of the issue -- and the fact that adoption of the Homestead Tax Option may cause the Christie Place unit owners' property taxes to triple -- the Committee hopes that its report will inform the public, the Village and School District, and engender the informed, respectful and engaged discussion that has been the hallmark of the Scarsdale Forum for the past 110 years. We look forward to being part of that dialogue.

Read the entire report here.