Replies to post #131732 on Tornado Alley (PROG)

[StephanieVanbryce]

When It Comes to Taxes, Older Is Better


Top, Frances Roberts for The New York Times; bottom, Chester Higgins/The New York Times

Taxes on this Rosedale, Queens, house, bottom, are more than double those at 720 Park Avenue, top, when true market values are considered

By JOSH BARBANEL Published: December 11, 2005

IF you can afford the many millions you need to live at 720 Park Avenue - and you squeak past the co-op board - you will find yourself in a building with all the advantages New York has to offer. It is one of the great old Park Avenue luxury apartment buildings, with tasteful 12-room apartments and neighbors who grace the social pages, the business pages and the lists of the world's richest people.

But 720 Park Avenue and its neighboring prewar dowagers, up and down the great streets of the city, enjoy another advantage: they pay uncommonly low property taxes, when compared with the market value of their apartments.

While the owners at 720 Park, which sits on the corner of 70th Street, pay about $40,000 per apartment in taxes each year, an analysis by The New York Times estimated that they would pay two to three times that if they were taxed at their true market values, under the system used for calculating taxes for single-family homes.

The analysis of 68,000 sales by The Times found that this advantage is woven into the tax base of most older co-ops and to a lesser extent many condominiums and postwar co-ops across Manhattan as market values have risen sharply. State law bars assessors from basing taxes for condos and co-ops at their true market value.

Average taxes on Manhattan co-ops and condos are lower than they would be if they were taxed the way some of the most heavily taxed houses are. But it is prewar co-ops that have the greatest tax advantage. On average, they pay significantly lower taxes as a percentage of market value than the taxes paid by even typical one- to three-family homes across the city. And buildings with unusually high recent market values, like 720 Park Avenue, pay unusually low taxes, even when compared to newer condominiums.

The owners of 720 Park Avenue pay about $3.20 for each $1,000 in value, based on estimates of the market value made by The Times from recent sales data.

On 148th Road in Rosedale, Queens, the mostly middle-class owners of boxy two-family homes - nurses, cabdrivers, mechanics and the like - pay more than $9 for each $1,000 in market value. They are among about 44,000 homeowners who pay at or close to the city's top tax rate. "I assumed that they pay more on Park Avenue," said Allyson Davilar, a nurse at North Shore University Hospital who has lived on 148th Road for 11 years. She pays $4,390 in taxes on a two-family house valued at $478,000 last year.

Jacqueline Stewart, a private duty nurse who lives next door, paid $435,000 for her house two years ago. Two weeks ago, Ms. Stewart received a notice raising her taxes by $181, to $4,390. Her husband, Godfrey, who maintains equipment for White Castle restaurants, said he didn't mind paying the taxes if Rosedale received good services, but he had complaints about the schools and what he said was the limited police presence in the neighborhood.

.........Very long article, tells the ins and outs and the differences between, co ops ..and the pre war 1931 properties
http://www.nytimes.com/2005/12/11/realestate/11cov.html?sq=park%20avenue%20tax&st=cse&scp=3&pagewanted=all

[StephanieVanbryce]

Show Me The Money: As Colorado Slashes Funds For Education, Tom Cruise Pays $400 In Property Taxes

In Colorado, Gov. John Hickenlooper (D) is proposing a massive $375 million cut to education funding and proposing to close four state parks. Meanwhile, Tom Cruise, whose net worth exceeds $250 million, pays Colorado just $400 a year in property taxes for a 248 -acre property outside of Telluride that he purchased for $18 million.

How does he do it? By manipulating a tax break designed to help struggling farmers. The Denver Post reports: [ http://www.denverpost.com/news/ci_17553507 ]

Actors, captains of industry, an Ivy League astrologer, sports figures, politicians… All these are also considered farmers or ranchers for tax purposes in Colorado. They have secured low property taxes through agricultural designations on land they own even though they personally have little or nothing to do with producing food — the reason state legislators originally created a low property-tax rate for the agriculture sector.

Actor Tom Cruise owns five parcels of land on a scenic mesa northwest of Telluride that has become an enclave of high-end vacation homes. Sheep graze around the mansions for brief periods each year, according to the assessor’s office.

Cruise has some company. The tax break is also abused by developers who “put an electrical fence up and put a couple of animals on there just to get the classification.” [ http://www.denverpost.com/news/ci_17549051 ]

The result is a redistribution of wealth from students and teachers of Colorado to Tom Cruise’s lavish lifestyle. The Today show, quoting a source, reports “Tom is really into money. … He has no problem spending it. It makes him feel powerful. He loves to brag about his Porsches, his homes, his planes and his motorcycles.” [ http://today.msnbc.msn.com/id/22477865/ns/today-entertainment/ ]

A recent exposé in the New Yorker also revealed that members of the Church of Scientology were paid $50 a week to do chores for Cruise, including customizing “a Ford Excursion S.U.V. that Cruise owned, installing features such as handmade eucalyptus panelling.” [ http://www.newyorker.com/reporting/2011/02/14/110214fa_fact_wright?currentPage=all ]

Update - Gov. Hickenlooper himself has benefited from the same loophole. He pays just $75 in property taxes on a 225 acre property. The local county assessor calls it "backasswards." [ http://facethestate.com/by-the-way/19735-farmer-hicks-tax-toll-his-agricultural-land-park-county-whopping-75-year ]

http://thinkprogress.org/2011/03/07/tom-cruise-tax-dodging/