Saturday, April 30, 2011
EDGEMONT ASSOCIATION BLOCK PARTY
Spent over an hour at the Edgemont Association's block party this afternoon. Chatted with residents about a variety of issues: crosswalk, a footbridge, Popham Road bridge construction, fire district overtime, pro's and con's of reassessment. Block party held at crane pond. Had a great time!
Subscribe to:
Post Comments (Atom)
3 comments:
There are increasingly worrisome signs that Greenburgh's financial instability -- with town taxes rising 47% between 2006 and 2011 -- may be hurting Edgemont property owners. As of April 22, 2011, realtor Houlihan Lawrence reports that only six Edgemont homes have been sold thus far this year at a median sale price of $917,500, with 53 on the market. By comparison, as of April 22, 2011 in Scarsdale, a total of 37 homes have been sold thus far this year, having a median sale price of $1,055,000, with 111 on the market. Scarsdale is, of course, more than twice the size of Edgemont, but these numbers showing six times as many sales in Scarsdale than in Edgemont are disturbing and out of control town taxes in G'burgh may be to blame.
In 2011-12, Scarsdale will pay only $229 per $1,000 assessed for municipal services, including fire, while Edgemont is now paying $277 per $1,000 assessed for municipal services, including fire ($175 for town and $102 for fire).
School taxes are still high in Scarsdale, at $838.40 per $1,000 assessed for 2011-12, while in Edgemont, school taxes for next year are projected to be $625.21 per $1,000 assessed. Some of the difference in taxes may be due to assessments. In Scarsdale, the average assessment is around $24,000; in Edgemont, the average assessment is estimated to be around $30,000. While that may explain why Scarsdale's school taxes are higher than Edgemont's, it doesn't explain why Edgemont's municipal taxes (for town services and fire) are that much higher than Scarsdale's.
Here's one key difference: Between 2006 and 2011, Scarsdale's municipal taxes will have increased 31.6% (from $174 per thousand to $229), while, as indicated in Edgemont, Greenburgh taxes during that same time period have jumped 47% (from $119 per thousand to $175), while our fire taxes during the same period went up only 11%.
.
The reason that Edgemont’s homes are selling so poorly right now compared to Scarsdale’s homes is that Scarsdale’s property taxes on comparably priced houses in Edgemont are now substantially below what Edgemont residents pay. In fact, the difference on a house assessed in Edgemont at $30,000 can be as much as $7,000.
In order to understand how Scarsdale’s property taxes compare with Edgemont’s, one has to use what is known as the Westchester County Residential Assessment Ratio or RAR, which is a number that seeks to equalize assessments in all of the county’s towns and villages. To do the comparison, you first take your home’s assessed value and divide it by the RAR in your town, which for Edgemont would be Greenburgh’s. That will give you the rough approximate market value of your home, at least how Greenburgh sees it. You then compare that number with the number you get by dividing your home’s assessed value by the RAR in, say Scarsdale. If the number you get is much higher than the number you got by doing the same exercise using Greenburgh’s RAR, then you know that your house, in Scarsdale, would have a lower assessed value. Once you do that computation, you can then multiply Scarsdale property taxes per $1,000 of assessed and compare them with Edgemont’s. When you do that, you will see that Scarsdale’s property taxes are now much lower than Edgemont’s.
Here’s how the comparison works: Assume you have a house in Edgemont that’s assessed at $30,000, which is about average for Edgemont. Greenburgh’s RAR for 2011 is 2.81. So, to calculate the market value of your house you divide $30,000 by 0.0281, which in this example comes to $1,067,615. As far as Greenburgh is concerned, that’s what your house is worth today. Now, take that same $30,000 assessed value and divide it by Scarsdale’s RAR. Scarsdale’s RAR for 2011 is 1.75. Doing the math yields a market value in Scarsdale of $1,714,286. However, assuming your house is worth about the same in Scarsdale as it is in Edgemont, that calculation would tell you that your assessment in Scarsdale on the same house would be much lower.
To determine what the assessed value of your house would be in Scarsdale, you take the market value of your house in Edgemont, which is $1,067,615 on a $30,000 assessment, and multiply that market value by Scarsdale’s RAR of 0.0175. Assuming a market value in Edgemont of $1,067,615, your assessed value in Scarsdale for the same property would now be $18,686. So, if you want to know whether your property taxes in Edgemont are more than they would be in Scarsdale for a comparably priced house, you simply multiply the Scarsdale tax rate (schools ($863) plus municipality, including fire, $229, or $1,092) by 18.686, and you get $20,405.
In Edgemont, with a $30,000 assessment, you would multiply the sum of our school taxes for next year (which will be $625) plus our town and fire taxes ($277) for a total of $902, by 30, and you get around $27,000, which is the amount you pay in school, town and fire taxes.
Thus, on a house assessed at $30,000 in Edgemont, you are now paying $7,000 more in property taxes than you would be paying on a comparably priced house in Scarsdale. This, of course, does not take into account county taxes. No surprise then that as wonderful as our school district is, at least for the first quarter of 2011, houses in Scarsdale are right selling six times more briskly as Edgemont’s houses.
Realtors, of course, know all this, which is why, in order to get Edgemont homes to sell, they may have to be priced substantially lower than they are currently priced. Edgemont homeowners, however, particularly those not selling their homes at this time, may not know these facts.
What should Edgemont do about this? School and fire taxes have been under control for the past several years. But municipal spending by Greenburgh has not been. Edgemont homeowners may now want to consider whether they need to take control over their municipal finances too.
.
Dear Skull and Bones:
You were close in your analysis on scvhool taxes, but there is a better measure. Namely one should use the municipality's equalization rate if you want to compare school tax rates based on estimated fair market value. The analysis that I did for another school district here in Westchester for the 2008-2009 school tax year indicated that the Edgemont tax rate per $ 1,000 of fair market value was $ 17.1369 ( and ranked number 10 most expensive in the County) as compared to Scarsdale's school tax rate of $ 11.7741 ( ranked number 33).
Post a Comment