Same Market, Different Math: Condo Taxes on Long Island - by Christopher Byrnes

Homeowners on Long Island are very familiar with property taxes, which are among the highest in the nation. For condominium owners, however, those taxes are often calculated differently than for single-family homes, depending on factors such as location, number of stories, and the age of the complex. These differences can create a meaningful financial advantage. The rules are not always intuitive, and they can vary based on where the property is located.

Under New York State law, the process for challenging a tax assessment is known as tax certiorari, a particularly active legal practice area in the region. If you live in a condominium, the appeal process can be more nuanced than it is for single-family homes.

First, under Section 339(y) of the Real Property Law (a subsection of the “Condominium Act”), each condominium unit must be assessed separately for tax purposes. In many areas, however, condominiums are subject to “restricted assessments,” meaning assessors are not permitted to base those assessments on market sales. Instead, they must apply a legal framework that treats the entire condominium as if it were a rental apartment complex, then allocate that total value among the individual units.

This appraisal methodology, known as the income approach to value, almost always results in lower tax burdens compared to similarly priced single-family homes, providing a significant benefit to condominium owners. Whether a condominium receives this favorable treatment depends on how the municipality classifies the property.

In municipalities that employ a multi-class property tax system, certain condominiums are exempt from these restrictions. New York City and Nassau County employ a four-class tax system that categorizes condominiums based on building height. Condominiums of four stories or more are classified as Class 2 and are valued using the income approach. Condominiums of three stories or fewer are classified as Class 1 and are valued based on comparable sales, in the same manner as single-family homes.

Similarly, the town of Islip uses a two-class system that distinguishes between homestead and non-homestead properties. There, the age of the development determines classification. Residential condominiums built after 1984 are considered homestead properties and are taxed in the same manner as single-family homes. Older condominiums are effectively grandfathered into the non-homestead classification and remain subject to restricted assessment. All other Suffolk County towns use restricted assessments. 

For condominium owners seeking to challenge their assessments, these classifications affect their options. In either scenario, the Condominium Act allows a condominium board to initiate a unified tax appeal on behalf of all participating unit owners in the community. Owners must affirmatively opt in to the appeal through a written authorization, but unanimous participation is not required. By signing the authorization, an owner grants the board full authority to prosecute and resolve the appeal on their behalf.

One of the board’s most important responsibilities in this process is selecting the right attorney. Tax certiorari is a specialized area of practice with some of the strictest deadlines in the law. It often requires retaining counsel experienced in tax assessment litigation, separate from the attorney who handles the condominium’s general governance matters. Boards should evaluate potential attorneys carefully, considering fee structures, responsibility for upfront costs such as filing and appraisal fees, communication practices, and availability to attend meetings or respond to questions from residents. 

Perhaps most importantly, the Board needs a clear understanding of who is responsible for distributing any tax refunds resulting from the appeal. This is an administratively complex process, involving issuing checks to every participating unit owner, determining closing dates for units sold while the appeals are pending, and locating former owners who no longer reside in the condominium. Ideally, the responsibility for calculating and distributing tax refunds or invoices should rest with the attorney, not the Board.

For condominiums that are not subject to restricted assessments, individual unit owners may file a Small Claims Assessment Review (SCAR) petition, as single-family homeowners do. Once a SCAR petition is filed, it supersedes any board-initiated appeal for that specific unit. In contrast, condominiums with restricted assessments are not eligible for SCAR, making a board-led proceeding the only available path to relief.

Ultimately, the board is the final decision-maker in the appeal. It may approve or reject settlements or direct the case to proceed to trial. These decisions should be made in consultation with legal counsel, and any resolution should treat all participating unit owners fairly and equitably.

Christopher Byrnes, Esq., is a partner at Schroder & Strom, LLP, Garden City, N.Y.