The Knowledge You Need When It Comes To Taxes and other FAQs
No one enjoys thinking about taxes. If you are thinking of purchasing or selling real estate, though, it is a necessary factor that will affect your transaction. Real estate attorney Phil Napolitano has the experience and knowledge to offer you assistance with all aspects of tax law as it pertains to your real estate transaction. Since 1996, people throughout New York City have turned to him at the Law Office of Phil Napolitano for strategic counsel.
On this page, he has answered a few of his prospective clients’ most common questions about taxes.
How Do Property Taxes Work In New York City?
The city has four categories by which it classifies real estate property:
- Class 1: Homes housing one to three families
- Class 2: Rental properties with four or more units
- Class 3: Certain utility properties
- Class 4: All commercial properties
Each property Class has a corresponding tax rate. For the year 2022, the property tax rates are as follows:
- Class 1: 19.963%
- Class 2: 12.234%
- Class 3: 12.289%
- Class 4: 10.755%
The applicable tax rate is multiplied by your property’s assessed value to determine the tax you will pay. There are also several tax exemptions and abatements offered by the City of new York for qualified property owners.
For a better understanding of how property taxes work and what you will pay, sit down to discuss your real estate holdings with a real estate attorney.
What Should I Know About Residential Real Estate Taxes vs. Commercial Real Estate Taxes?
When it comes to residential property (buildings where people reside) and commercial property (buildings used for nonresidential activity, such as business) taxes can be quite varied. The most significant difference is the size of your tax bill. Commercial properties are taxed based on their assessed value, so their property taxes are usually significantly higher.
What Is A Capital Gains Tax?
The term “capital gains” refers to the profits you make by selling a property for more than its purchase price. The capital gains tax is the tax that the Internal Revenue Service (IRS) and State taxing authorities imposes on these profits. Before beginning the process of selling your property, you should consult with your tax professional to determine what your tax liability will be. Investors frequently have the option of using a 1031 tax-deferred exchange to defer their capital gains tax. Additionally, significant exemptions from capital gains tax may apply for the sale of a primary residence. Contact us to discuss if you qualify for such exemptions.
Is There A Way To Stop Foreclosure?
You can sometimes take steps to delay or prevent foreclosure. The options could include:
- Modifying your loan
- Negotiating with your lender
- Requesting a mortgage forbearance
- Selling the home
- Signing a deed in lieu of foreclosure
- Filing bankruptcy
Phil can sit down with you to explore whether one of these options is right for you.
Do I really Need An Attorney?
The various costs associated with real estate are expensive enough as it is. Do not make the mistake, though, of trying to handle real estate law on your own. Hiring a lawyer can save you money in the long run by helping you avoid errors or accidentally violating the law. An attorney like Phil can also add value to your investment by helping you make wise financial choices and avoid costly mistakes..
Hear More Answers To Your Questions
You likely have many more questions about real estate , as it is an incredibly complex topic. For a one-on-one conversation with an attorney, get in touch with Phil Napolitano. You can call his Bronx office at 718-414-6175 or send him an email to schedule your initial consultation.