People often talk about property tax grievances as shifting tax responsibility onto your neighbors, and there is a core truth to this statement.
As the NYSORPTS themselves have pointed out, “Taxes are a zero sum game ‐ what one property owner doesn’t pay will be picked up by someone else”
I would contend that a successful grievance transfers excess property tax responsibility back onto the other taxpayers, since in order to be approved you need to prove overtaxation.
One aspect I never hear talked about is the transfer of tax burden associated with home sales, the majority of which in our analysis are classified as being underassessed.
Potential Savings
One of the metrics utilized during our marketing analysis is referred to as POT_SAV, or “potential savings”, and is a key metric for Mr Bonds’ weighted analysis of annual sales, used to determine our optimized marketing strategy for the year.
Potential Savings refers to the difference in the Current Assessed Value of a property less the Sale Assessed Value (sale price X residential assessment ratio) multiplied by the most recent School Tax Rate for the property.
(current_av − sale_av)*school_rate
The value of POT_SAV can be positive or negative, and is reflective of how much tax the property will be paying relative to what it should⁄would be at the sale price.
The Five Towns Overall
When we look at the 5009 sales in our Five Towns analysis region that conformed to our requirements, the aggregate total of POT_SAV is -$3,339,447.
That means, on average, new purchasers in the Islip, Babylon, Brookhaven, Smithtown, and Huntington towns are being subsidized about $667 on their School Taxes by their neighbors.
Sometimes, details can be lost in the aggregate. When we start to break down these sales by Assessment fairness, a much different picture emerges.
| SALE CLASSIFICATION | SCHOOL LEVY DIFF (SUM) | BILL DIFF (AVG) |
| TOTAL (5009) | -3,339,447 | -666.82 |
| OVER (1110 – 22%) | 1,919,088 | 1,728.91 |
| UNDER (2873 – 57.5%) | -5,208,540 | -1,812.93 |
| FAIR (1026 – 20.5%) | -49,995.46 | -48.7 |
Here, we see that the fairly assessed are just that ‐ on average their School Tax bills would be just about $50 light, which in terms of accuracy for assessments is pretty good.
Our 22% of overassessed purchasers: on average, those 1110 unlucky folks will be expected to pay about $1700 next year in School Taxes over and above their fair share, each.
(Unless they grieve their assessment, may I recommend Property Tax Agency?)
Meanwhile, the majority of new home buyers in the Five Towns will be subsidized on their School Taxes to the tune of about $1800 each, on average, for a total of $5,208,540.
That’s just this year, among sales that conform to our requirements and timeframe, and just School Taxes (at “last year’s” rates).
Breakdown by Township
| SALE CLASSIFICATION | SCHOOL LEVY DIFF (SUM) | BILL DIFF (AVG) |
| BABYLON | ||
| TOTAL (613) | -595,417.7 | -971.32 |
| OVER (104 – 17%) | 153,960.7 | 1,480.39 |
| UNDER (405 – 66%) | -748,464.9 | -1,848.06 |
| FAIR (104 – 17%) | -913.578 | -8.78 |
| BROOKHAVEN | ||
| TOTAL (2030) | -1,379,101 | -679.36 |
| OVER (461 – 22.7%) | 732,690.4 | 1,589.35 |
| UNDER (1209 – 59.5%) | -2,092,837 | -1,731.05 |
| FAIR (360 – 17.7%) | -18,954.51 | -52.65 |
| HUNTINGTON | ||
| TOTAL (727) | -324,920.4 | -446.93 |
| OVER (216 – 29.7%) | 526,158.4 | 2,435.92 |
| UNDER (333 – 45.8%) | -842,978.3 | -2,531.47 |
| FAIR (178 – 24.5%) | -8,100.53 | -45.51 |
| ISLIP | ||
| TOTAL (1118) | -630,860.3 | -564.28 |
| OVER (231 – 20.6%) | 301,302.4 | 1,304.34 |
| UNDER (618 – 55.4%) | -914,603.1 | -1,479.94 |
| FAIR (269 – 24%) | -17,559.62 | -65.28 |
| SMITHTOWN | ||
| TOTAL (521) | -409,147 | -785.31 |
| OVER (98 – 18.8%) | 204,976.3 | 2,091.59 |
| UNDER (308 – 59.1%) | -609,656.1 | -1,979.40 |
| FAIR (115 – 22.1%) | -4,467.231 | -38.85 |