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Recently Enacted City Bar Legislation: Increase to the Tax Commission TC309 Accountant Certification Assessment Threshold

As a result of legislation drafted by the City Bar’s Condemnation and Tax Certiorari Committee (Reed Schneider, Chair; Peter Blond, Immediate Past Chair) New York City has adopted a much-needed increase to the property value threshold below which a property owner would not need a statement of income and expenses prepared by a certified public accountant (CPA) to obtain a reduced assessment. The Tax Commission requires taxpayers seeking correction to the property-tax assessment of their income-producing property to hire a CPA to audit a statement of income and expenses of the operation of the property for the most recently completed calendar or fiscal year. Since 1973, the threshold for submitting an audit was set at $1 million in property value, however in the intervening 46 years property values have increased greatly, encompassing many more small property owners. The submission of the required CPA statement, which frequently costs $10,000 or more to prepare, is a costly and unfair burden on those owners who were not the intended target of the law when it was first enacted. Increasing the threshold to $5 million, as was proposed by the Condemnation and Tax Certiorari Committee, is simply remedial in nature, and a necessary step towards increasing fairness in the administration of New York City property taxation. 

This new law was enacted on February 24 but is considered effective for January 1, 2019 so as to be available for applications for the 2019-20 tax year. It contains an indexing component to adjust the threshold every five years to ensure timely increases going forward. For more information, please visit the NYC Tax Commission website.