Six similar North Fork homes, six completely different tax bills

01/10/2012 8:39 AM |

TIMES/REVIEW GRAPHIC | Six homes all on the market at similar prices across the North Fork have completely different tax bills. We asked why that is.

Taxes, taxes, taxes.

North Fork homeowners pay a lot of them, but there’s a gaping disparity with some paying far more than others for similar properties.

The owner of a three-bedroom ranch in Wading River currently on the market for about $350,000, would pay $7,865 in property taxes, according to the Multiple Listing Service of Long Island.

But property taxes on a two-bedroom home just 20 miles east in New Suffolk, priced at $325,000, are just $1,526 — less than one-fifth of the taxes on the Wading River home.

Why the difference? The answer appears to be twofold, the size and expense of the local school district, and the community’s property wealth. Districts with large commercial centers or many seasonal or vacation homes have more taxpayers sharing the load so tax rates tend to be lower.

“It’s all based on the school,” said Bob Scott, chairman of Southold’s Board of Assessors.

New Suffolk School District, which currently educates just 16 students in grades pre-K through six, historically puts up budgets that are significantly below those of other school systems, and school taxes typically comprise 60 to 65 percent of property tax bills, Mr. Scott said.

Longtime Southold mortgage consultant Richard Winters said a major chunk of New Suffolk’s school tax revenue comes from Robins Island, the privately owned 435-acre island between Great and Little Peconic Bays. That and no small amount of revenue from other waterfront seasonal properties, that as a rule do not add children to the school, eases the burden on the rest of the community.

Taxes are higher on the Wading River home, which lies within the Shoreham-Wading River School District. Residents there have long argued that higher taxes are the result of a lack of commercial development of the type seen in surrounding hamlets.

Property taxes vary greatly among similar houses from Wading River east to Orient, according to an unscientific survey of six two- or three-bedroom homes in various hamlets listed on the market for between $300,000 and $350,000. Houses with features that hike up taxes, such as swimming pools and water views, weren’t included.

The taxes on similar homes in Wading River, Riverhead and Flanders are $7,865, $6,943 and $3,966, respectively. In Southold Town, taxes on houses for sale in Greenport, Mattituck and New Suffolk are $4,977, $6,612 and $1,526, respectively.

Environmentalists have long pointed to the yawning tax rate differences as evidence that preservation keeps taxes low and development, which raises the demand for police and other public services and increases school populations, adds to the property tax burden.

Some residents of Flanders, which is within Southampton Town but part of the Riverhead School District, have argued that all the county parkland there has taken too much acreage off the tax rolls and so have unfairly saddled residents with higher taxes. Others, however, side with Long Island Pine Barrens president Dick Amper that preservation is a tax plus “because deer don’t send their kids to school.”

With the continuing development of the Route 58 business corridor, Riverhead’s commercial tax base has risen dramatically in recent years. But financial benefit has been offset by rising student enrollments. In October, Riverhead residents approved a $78 million school bond to finance infrastructure repairs and improvements and add additional classrooms.

From a real estate standpoint, houses with lower taxes tend to be easier to sell, real estate agents say.

Town and Country Real Estate agent Wilfred Joseph, who listed the house in New Suffolk, said more buyers have requested showings on that home than on his other listings. New Suffolk properties with their low taxes are always among his most popular.

“People from Nassau come here and are amazed,” Mr. Joseph said.

Buyers seeking homes with property taxes at the lower end of the spectrum are more likely to secure loans from banks, according to Mr. Winters.

High property taxes “create an automatic expense,” he said. “If your taxes are really high for the market area, it could do two negative things. One, it requires you to have to have more income. And if the appraiser is on his toes, he’s going to mention it as a negative element of the property.”

And homeowners hankering for a larger deck or room expansion should be wary of the resulting property tax hike, said Mason Haas, a member of Riverhead Town’s Board of Assessors.

He said homeowners should bear in mind that property taxes can fluctuate. He recommends that residents bring any improvement plans to the assessor’s office to figure out how their taxes may change.

“It’s better to find out and plan in advance than get sticker shock later,” he said.

sbrix@timesreview.com