Consider the Taxes if You’re Buying in the Big Apple

Consider the Taxes if You’re Buying in the Big Apple

The draw of the Big Apple: there’s nothing quite like it. There’s just something magical about the bright lights of New York City. But, unless you’re prepared to pay for it, then the city so nice they named it twice could be just a dream. Even if you have enough to buya home in the area, you might not have enough to pay the taxes. So, if you’re looking to move the big city, then make sure you can afford the tax bill.

Property Taxes Are Sky High

Here’s why you need to be ready. Property taxes in the entire tri-state area are generally right around 10 percent. That’s right. If you own a home in New York or the surrounding area then you would have to set aside 10 percent of your hard-earned money just to pay your property taxes. Of course, it’s not a flat rate, but as one example, homeowners in the Westchester area pay about $15,000 a year on average in property taxes. That is roughly 10 percent of the average adjusted gross income in that area, which is $148,775.

Manhattan Also High on the List

Manhattan residents pay about $14,400 annually in property taxes, but their average income is roughly $60,000 more than residents’ in Westchester County. So Manhattan residents are generally paying a smaller percentage of their income to property taxes. But $14,400 is still a hefty bill and it’s enough to come in second place in the tri-state area. You don’t have to look much further to find the rest of the counties with the highest property taxes. Two more counties in New York, five counties in New Jersey and one county in Connecticut make up the rest of the top 10 most expensive counties for property taxes.

Renting Is Another Option

If you’re looking to buy in the area, then you have no choice to consider the potential property tax bill. That’s why for some, renting has become a more feasible option. The numbers bear that out. According to a report from Zillow, from 2006 to 2016, the renter rate in the tri-state area has increased five percentage points to 36 percent. Part of the problem for New Yorkers is the new Tax Cut and Jobs Act. Homeowners used to be able to deduct their entire property tax bill from their taxes. But starting this year, they can only deduct up to $10,000in state and local taxes from their federal returns. Anyone with annual property taxes exceeding $10,000 is left to foot the entire bill, without any additional deductions.

Check Your Numbers

For some the high taxes aren’t enough to persuade them to look outside of the Big Apple area. But for others, the high property tax bill could be too much to swallow. So if you want to come to the New York City area, or the western part of the state, you better be sure the tax bill fits into your budget.

We hope you found this article about “Consider the Taxes if You’re Buying in the Big Apple” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at www.GROCO.com.  Unfortunately, we no longer give advice to other tax professionals gratis.

To receive our free newsletter, contact us here.

Subscribe to our YouTube Channel for more updates.

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

GROCO.com is a proud sponsor of The American Dreams Show.

The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.