The Nassau County Reassessment Phase-In: What You Need to Know

On March 23, 2020, the Nassau County Legislature passed the Reassessment Phase-In Act of 2020 (RPIA) formerly known as the Taxpayer Protection Plan.

What the RPIA Does

The RPIA provides a five-year phase in for changes to a homeowner’s assessed value for the 2020/21 tax year, caused by the countywide reassessment. Without it, about half of Nassau County homeowners whose property assessed values increased may have faced significantly increased tax liability this Fall. Homeowners will first see the effect of the RPIA in their school tax bill in October 2020, and in their general tax bill in January 2021.

Background

In the Fall of 2018, when the Nassau County Department of Assessment released the first document pertaining to the reassessment – the “Assessment Disclosure Notice” aka the “511 Notice” – there was a massive uproar among Nassau homeowners. The document was bare – for practically every homeowner it simply showed a significant increase in their market value. Taxpayers were panicked. The County and taxpayer representatives, like Maidenbaum, were flooded with frantic phone calls and emails. Politicians took notice, and talks of a “phase-in” of the assessment changes began. A phase-in would (hypothetically) lessen the financial burden on homeowners who were in line for hefty tax increases.

How the RPIA Works

The RPIA works by effectively phasing in, over the course of five years, any increase in your 2020/21 market value (as listed on the 2020/21 tentative roll) from your Final 2019/20 market value (certain rare exceptions apply, like new construction).  Initially, an “exemption base” is determined by taking that increase and multiplying it by 0.1%.  For example, if your increase from 2019/20 to 2020/21 was $150,000, you would have an exemption base of 150 ($150,000 x 0.1% =150).

During the first year of the reassessment, 80% of the exemption base is subtracted from your total assessment, and you pay taxes on the difference.  Then, it’s 60%, 40% and 20% of the exemption base for the second, third and fourth years, respectively.  By year five, there is no longer an exemption and the new assessed values are fully implemented.  Using an exemption base of 150 as a hypothetical example, the homeowner would receive the following exemptions under the RPIA:

Tax Year Exemption Base Applicable Percentage Exemption Amount
2020/21 150 80% 120
2021/22 150 60% 90
2022/23 150 40% 60
2023/24 150 20% 30
2024/25 150 0% 0 (No exemption)

To put it in more concrete terms, let’s say the County raised a homeowner’s value from $500,000 to $650,000.  The exemption base would be 150.  During the first year of the reassessment, rather than be taxed on an assessed value of 650 (remember, the County’s assessed value is the market value multiplied by 0.1%), the homeowner would be taxed only on an assessed value of 530 (650-120 = 530).  The following years, the homeowner would be taxed on assessed values of 560, 590, and 620 until the full 650 assessed value is implemented.

So, instead of immediately jumping from 500 to 650, you would gradually get there, easing the tax liability and burden.

However, unfortunately, this phase-in will also apply to those expecting a significant assessed value decrease. That benefit will only come gradually. There will be no magic bullet of massive tax relief.

What’s Next

In testimony before the Legislature on March 3rd, Nassau County Assessor David Moog noted that the timetable for incorporating the phase-in into the County’s tax system was extremely tight, with April allocated to writing code so that the RPIA’s new values could be implemented accordingly. COVID-19 could clearly be a hindrance to that process.

Our Take

The current health crisis is like nothing we’ve ever experienced. We wish you and your loved ones health and happiness during this difficult, unprecedented time in our history.

Regarding the RPIA, we will also have to wait and see how COVID-19 impacts the County’s implementation process and follow through. Our stance is that, for some homeowners, the RPIA will lessen the “sticker shock” of the County’s 2020/21 reassessment. For others, it will not be so beneficial.

In the meantime, we advise each and every Nassau County homeowner concerned about their property tax assessment to contact us to file a tax grievance. As a reminder – the deadline to file a 2021/22 Nassau County property tax grievance has been extended to April 30, 2020.  Stay safe!