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The shimmering limestone tower at 15 Central Park West, where apartments routinely trade for upward of $20 million, has become symbolic of the most luxurious upper reaches of New York’s real estate market.
And earlier this year, a single penthouse sold for $88 million.
The residential portion of that Manhattan building is officially valued by the city, for tax purposes, at only $332 per square foot.
In reality, the average price per square foot for apartments sold there over the past 18 months has been $7,813.
If a certain kind of property is systematically undervalued, another kind of property has to pick up the slack
In a study of 2010 nationwide property tax rates, the average homeowner paid a median of 1.14 percent of home value that year, according to the Tax Foundation, a research group.
In Manhattan, that figure was 0.78 percent.
For the $88 million apartment at 15 Central Park West, 0.78 percent would be $686,000.
But this year, the property taxes due on that penthouse were $59,000.
The owners of that penthouse — the financier Sanford I. Weill sold it to a trust controlled by Ekaterina Rybolovleva, the daughter of a Russian billionaire — were also helped by a program called 421a, which gives developers big tax breaks for a certain number of years that they can pass along to condo buyers...
But even without the 421a abatement, the bill for the penthouse would have been only $145,000.
An apartment at the Plaza Hotel that sold for $48 million last year is valued by the city at $1.7 million, or 3.5 percent of its sale price.
A condo at 80 Columbus Circle that sold for $30.55 million last summer is valued at $2 million, or 6.5 percent.
And the $88 million apartment is valued at $2.97 million, just 3.4 percent.
If the property taxes on these luxury apartments were to rise, would it even make a difference in sales to the super-rich?
http://www.nytimes.com/2012/10/16/n...rk-apartments-have-modest-tax-rates.html?_r=1
And earlier this year, a single penthouse sold for $88 million.
The residential portion of that Manhattan building is officially valued by the city, for tax purposes, at only $332 per square foot.
In reality, the average price per square foot for apartments sold there over the past 18 months has been $7,813.
If a certain kind of property is systematically undervalued, another kind of property has to pick up the slack
In a study of 2010 nationwide property tax rates, the average homeowner paid a median of 1.14 percent of home value that year, according to the Tax Foundation, a research group.
In Manhattan, that figure was 0.78 percent.
For the $88 million apartment at 15 Central Park West, 0.78 percent would be $686,000.
But this year, the property taxes due on that penthouse were $59,000.
The owners of that penthouse — the financier Sanford I. Weill sold it to a trust controlled by Ekaterina Rybolovleva, the daughter of a Russian billionaire — were also helped by a program called 421a, which gives developers big tax breaks for a certain number of years that they can pass along to condo buyers...
But even without the 421a abatement, the bill for the penthouse would have been only $145,000.
An apartment at the Plaza Hotel that sold for $48 million last year is valued by the city at $1.7 million, or 3.5 percent of its sale price.
A condo at 80 Columbus Circle that sold for $30.55 million last summer is valued at $2 million, or 6.5 percent.
And the $88 million apartment is valued at $2.97 million, just 3.4 percent.
If the property taxes on these luxury apartments were to rise, would it even make a difference in sales to the super-rich?
http://www.nytimes.com/2012/10/16/n...rk-apartments-have-modest-tax-rates.html?_r=1