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Long Island Real Estate Tax question
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newlywedT
LIF Adolescent
Member since 9/11 792 total posts
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Long Island Real Estate Tax question
This is what I keep hearing when it comes to Long Island homes compared to Queens homes.
"You get more home for the money but you pay a lot more in real estate tax."
I just had 2 thoughts, please tell me if I am correct or if I am looking at it the wrong way.
1. Real Estate tax, you get most of it back because you can deduct it on your taxes.
2. On Long Island, even though I am paying a lot more in Real Estate tax, I save money because I no longer pay NYC City tax on my State Tax form.
Is this correct? I am going to use made up numbers for ease of math.
scenario 1 - house in Long Island
Real Estate tax - 10k
Income - 100,000
NYC local tax (line 47 on the state tax form) - $0
NY State tax - 6,000 (including NYC local tax, yonkers tax and so on)
scenario 2 - house in Queens
Real Estate tax - 5k
Income - 100,000
NYC local tax (line 47 on the state tax form) - 4,000
NY State tax - 10,000 (including NYC local tax, yonkers tax and so on)
So in scenario 1, even though I pay 10k in real estate tax....I get to deduct the 10k on my taxes, ALSO I get to save on the NYC local tax, which is 4k (in the example)
In scenario 2, I pay only 5k in real estate tax, but I also pay 4k in Local NYC tax.
So I end up paying the almost the same 10k as scenario 1, except I only get to deduct 5k on my taxes.
Is this correct?
In that case, isnt it better to live in LI?
Even with the higher real estate tax, you get to deduct it, AND you save on the NYC Local tax.
Which on my tax form last year was almost HALF of my State tax.
So thats a lot.
Am I missing something?
Is there a LI tax that goes on my State Tax form? I dont think there is, but it seems like LI is better in terms of $$$, because you save on the NYC Local City tax.
Thank you
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Posted 9/7/11 11:45 PM  |
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Prudential Douglas Elliman Real Estate
Long Island's Largest Bridal Resource | Long Island Weddings |
acm1899
LIF Adult
Member since 1/11 1085 total posts
Name:
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Re: Long Island Real Estate Tax question
You can take an itemized deduction for all state & city income taxes as well as all property taxes on your federal income tax form Schedule A. So your thinking isn't correct.
In Scenario 2 you do get to deduct your $4k NYC taxes.
Message edited 9/7/2011 11:57:17 PM.
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| Posted 9/7/11 11:56 PM |
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hanna7636
LIF Adult
Member since 8/06 921 total posts
Name:
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Re: Long Island Real Estate Tax question
You can deduct them (not sure details) but my refund is nothing compared to what I pay in property taxes.
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| Posted 9/8/11 9:21 AM |
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b2b777
LIF Adult
Member since 9/09 4474 total posts
Name:
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Re: Long Island Real Estate Tax question
I think the more $ you make, the more it begins to even out, or be more profitable for you to live out of NYC.
I had my accountant do the math and it added up better for us to leave Queens and move to LI.
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| Posted 9/8/11 11:12 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Long Island Real Estate Tax question
Posted by newlywedT
1. Real Estate tax, you get most of it back because you can deduct it on your taxes.
2. On Long Island, even though I am paying a lot more in Real Estate tax, I save money because I no longer pay NYC City tax on my State Tax form.
Is this correct? I am going to use made up numbers for ease of math.
You have to understand what deducting means for #1. You don't "get most of it back". In fact you only get a very small percentage of it back (maybe 20% or so depending on your bracket).
The way I look at it, you pay real estate taxes with gross pay (not net). So after you subtract your RE taxes from your gross, you are only paying income taxes on the remainder of your HHI.
With #2... yes you pay more RE taxes in Long Island, but you don't pay NYC taxes. So it sort of evens out.
But if it was up to me based on your previous thread, i'd rather live in a nice neighborhood in Queens vs. Nassau county. It's more desireable. Higher property values. Better chance of property values going up since you don't have to worry about insane Long Island taxes.
If you can afford Oakland Gardens (or any area around there), that is where I would buy.
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| Posted 9/8/11 12:09 PM |
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newlywedT
LIF Adolescent
Member since 9/11 792 total posts
Name:
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Re: Long Island Real Estate Tax question
Posted by ave1024
But if it was up to me based on your previous thread, i'd rather live in a nice neighborhood in Queens vs. Nassau county. It's more desireable. Higher property values. Better chance of property values going up since you don't have to worry about insane Long Island taxes.
If you can afford Oakland Gardens (or any area around there), that is where I would buy.
Why is Queens more desireable than LI?
Isnt LI where the "rich" move to?
Like Billy Joel, and Jennifer Lopez, etc...
of course, its not like I am going to be their neighbors.
What areas near Oakland Gardens do you recommend?
Douglaston and Little Neck?
I think Oakland Gardens is better than Fresh Meadows.
Thank you
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| Posted 9/8/11 9:05 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Long Island Real Estate Tax question
Posted by newlywedT
Posted by ave1024
But if it was up to me based on your previous thread, i'd rather live in a nice neighborhood in Queens vs. Nassau county. It's more desireable. Higher property values. Better chance of property values going up since you don't have to worry about insane Long Island taxes.
If you can afford Oakland Gardens (or any area around there), that is where I would buy.
Why is Queens more desireable than LI?
Isnt LI where the "rich" move to?
Like Billy Joel, and Jennifer Lopez, etc...
of course, its not like I am going to be their neighbors.
What areas near Oakland Gardens do you recommend?
Douglaston and Little Neck?
I think Oakland Gardens is better than Fresh Meadows.
Thank you
The "rich" move to Long Island because they require seclusion and acres and acres of land.
The elite areas of Queens are more desireable than Long Island due to their proximity to Manhattan. That's why property values in these areas are high. I think Queens houses will be quicker to rebound in price than Nassau. Also add in the fact that property taxes are so low makes a big difference.
As far as nice areas to look at... i'd live anywhere between the Clearview Expressway and Cross Island... between the Long Island Expressway and Grand Central. Big bucks for houses in that area (600-800k).
Also Fresh Meadows between 188st and Francis Lewis is very nice... between 73rd avenue and the Grand Central.
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| Posted 9/9/11 2:48 PM |
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