Property Taxes

Property taxes are based on your assessed value, which is basically what your house looks like on paper—beds, baths, square footage, acreage, and any fun extras like a pool or a fancy shed. It’s always lower than market value, so don’t panic when you see the number. Your taxes fund local town and school budgets, and your assessed value determines your share of that bill—kind of like a group dinner, except you can’t argue over who ordered the lobster.

If the town or school budget goes up, everyone chips in a little more that year. But if 10 new houses pop up in your area, those fresh taxpayers help spread the cost, and your bill could actually go down (wild, right?). The key takeaway? Your property taxes aren’t just about what your home is worth—they’re tied to your community’s spending habits, the number of taxpayers, and whether your town just had to redo the town park for the third time this decade, or perhaps needs a new ambulance vehicle. Paying attention and voting on town and school budgets are important for this reason.

Taxes and Programs to Consider:

Transfer Tax - A Closing Cost.

In New York, selling a home comes with a little parting gift to the state—the NY State Transfer Tax. This tax applies to most real estate transactions and is typically the seller’s responsibility, though in competitive markets, buyers sometimes agree to cover it. The standard rate is $2 per $500 of the sale price (or 0.4%), but if your property sells for $3 million or more, the rate jumps to $3.25 per $500 (or 0.65%)—often called the “mansion tax.” This fee is collected at closing and deducted from your sale proceeds, so while you won’t have to write a separate check, it’s important to factor it into your bottom line. I’ll make sure you know exactly what to expect so there are no surprises on closing day.

Mansion Tax - A One-Time Buyer Fee.

In New York, buying a home over $1 million comes with an extra expense—the Mansion Tax. This one-time fee is paid by the buyer at closing and starts at 1% of the purchase price. For properties over $2 million, the tax increases on a sliding scale, reaching 3.9% for homes over $25 million. It applies to all types of residential properties, from condos and co-ops to townhouses and single-family homes. Since this tax can add a significant chunk to closing costs, it’s important to factor it into your budget upfront. I’ll make sure you’re fully prepared so there are no surprises when it’s time to close.

Agricultural Assessment Program - Lower Assessments for Farming.

The New York State Agricultural Assessment Program is designed to reduce property taxes for farmers by assessing farmland based on its agricultural value rather than its full market value. This often results in significantly lower property taxes, making it easier for farmers to maintain and expand their operations. To qualify, you need at least seven acres (which can be across multiple parcels used by a farmer - meaning your 3 acres could become part of someone else’s assessment program if you don’t have a full seven) actively producing and pulling in $10,000+ a year (or $50K if you’re working with less land). Fill out the paperwork every year by March 1st, and you’re in business—just don’t try to turn your fields into a strip mall, or you’ll owe back taxes. Plus, if you build a new barn or greenhouse, you might dodge taxes on that for 10 years too. Bottom line? If you’re farming, make sure you’re not overpaying on property taxes.

STAR - Reimbursement of School Taxes.

The School Tax Relief (STAR) Credit is a reimbursement of school property taxes from New York State. It comes in the form of a check via mail every year. If your home is your primary residence, and your income is $500,000 or less, you’re eligible for the Basic STAR Credit. Who knew?! Additionally, if you’re 65 or older with an income of $92,000 or less, you may be eligible for the Enhanced STAR Credit. Register online at www.tax.ny.gov/star It’s super straightforward and easy to set up!