Keith Mack
Westchester County, New York, has some of the highest property taxes in the US. In 2017, the average property tax bill in the county was $17,178, with an effective property tax rate of 2.39%. In 2023, the average bill was $17,179. In 2019, Governor Cuomo pushed to make permanent a tax cap that limits the annual growth of property taxes levied by local governments and school districts to 2% or the rate of inflation, whichever is less. This tax cap was set to expire in 2020. This article will explore the impact of the tax cap law on taxes in Westchester County and whether it has helped to alleviate the tax burden on residents.
| Characteristics | Values |
|---|---|
| Location | Westchester County, New York |
| Average Property Tax Bill | $17,178 (2017) |
| Effective Property Tax Rate | 2.39% (2017) |
| Property Tax Cap | Limits annual growth of property taxes to 2% or the rate of inflation, whichever is less |
| School Taxes (before cap) | Increased by an average of 5% annually |
| Impact of Tax Cap | Limits annual growth of property taxes levied by local governments and school districts |
| Tax Savings Initiatives | County-Wide Shared Services Initiative (CWSSI) |
| Highest Costs | Salaries, health benefits, and retirement funds |
| Federal Tax Law Impact | Caps mortgage interest deduction at $750,000 and limits state and local tax deductions to $10,000 |
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What You'll Learn
- Westchester County has some of the highest property taxes in the US
- The tax cap limits the annual growth of property taxes to 2% or the rate of inflation
- The average property tax bill in the county in 2017 was $17,178
- The new federal tax law caps mortgage interest deductions and limits state and local tax deductions
- School district services sharing and consolidation are not a primary focus of the CWSSI
Westchester County has some of the highest property taxes in the US
Westchester County, New York, has some of the highest property taxes in the US. The average property tax bill in the county was $17,178 in 2017, with an effective property tax rate of 2.39%. This figure is expected to have increased since, with the Westchester County Budget proposing a 2% property tax increase for 2019.
Westchester County's property taxes are the highest in the nation as of 2023, with an average property tax bill of $17,179. The high property taxes in Westchester are due in part to the county's proximity to New York City, employment opportunities, and quality of life. The county is home to 19 towns and six cities, with a total of 45 municipalities when villages are included. Each of these municipalities has unique characteristics, but they share the challenge of high property taxes.
The county's tax code consists of city, town, village, school, and special district tax rates, which can result in residents paying multiple property tax rates if they live in a village within a surrounding town and fall under a specific school district. Property taxes are the primary source of public funding in Westchester, as the small, high-reputation villages and towns that make up the county are mostly residential, with few businesses contributing property taxes. The largest recipients of tax dollars are public schools, which receive 65 cents of every tax dollar.
To address the high tax burden on residents, Governor Cuomo introduced the County-Wide Shared Services Initiative (CWSSI) to promote efficiencies and increase taxpayers' savings. Additionally, the New York state legislature passed a bill to make permanent a tax cap that limits the annual growth of property taxes levied by local governments and school districts to 2% or the rate of inflation, whichever is less. This tax cap has been in effect since 2011 and is aimed at curbing the rapid growth of property taxes in the county.
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The tax cap limits the annual growth of property taxes to 2% or the rate of inflation
Westchester County, New York, has some of the highest property taxes in the US. The average property tax bill in the county in 2017 was $17,178, with an effective property tax rate of 2.39%. In 2023, the average property tax bill was $17,179. The county has different layers in its tax code, including city, town, village, school, and special district tax rates. These rates are not mutually exclusive, and residents may have to pay multiple rates.
In 2011, New York State introduced a tax cap that limits the annual growth of property taxes levied by local governments and school districts to 2% or the rate of inflation, whichever is less. The tax cap was made permanent in 2019 and was set to expire in 2020. However, Governor Andrew Cuomo pushed to extend it, and the state legislature proposed a bill to make it permanent. Before the cap was enacted, school taxes went up on average by 5% annually.
The tax cap has helped limit the growth of property taxes in Westchester County, but residents still face high taxes. In 2019, the Westchester County Budget proposed a 2% property tax increase. To provide relief to highly taxed residents, Governor Cuomo introduced the County-Wide Shared Services Initiative (CWSSI), which aims to promote efficiencies and increase taxpayers' savings. The initiative requires governments to convene a shared services panel consisting of the chief executive officer of all towns, villages, and cities.
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The average property tax bill in the county in 2017 was $17,178
The average property tax bill in Westchester County in 2017 was $17,178, with an effective property tax rate of 2.39%. This figure is one of the highest in the nation, and the bill can easily be two or three times higher. For instance, a medium-sized house on a medium-sized lot in southern Westchester could expect a bill of $40,000 per year. A large, newly built house on a bigger lot in one of the smaller villages could face a tax bill of $70,000-$80,000.
The size of the bill is due to the way Westchester levies taxes. The county has different layers in its tax code, including city, town, village, school, and special district tax rates. If you live in a village within the jurisdiction of a town, you may have to pay two separate property tax rates, in addition to the tax for your school district.
Westchester County has some of the highest taxes in the U.S. Before the cap was enacted in 2011, school taxes went up on average by 5% a year. The tax cap limits the annual growth of property taxes levied by local governments and school districts to 2% or the rate of inflation, whichever is less. The cap was made permanent in 2019 but was set to expire in 2020. If the cap is eliminated, property taxes could rise significantly.
In 2019, the Westchester County Budget proposed a 2% property tax increase. Additionally, federal tax reform in late 2017 limited state and local tax deductions to $10,000, well below the average Westchester resident's payments. However, the new federal tax cuts for high-income individuals are likely to help offset property tax increases through 2025.
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The new federal tax law caps mortgage interest deductions and limits state and local tax deductions
The Tax Cuts and Jobs Act (TCJA) of 2017 has limited two major provisions in the federal tax code: the state and local tax (SALT) deduction and the home mortgage interest deduction (MID).
The SALT deduction allows taxpayers who itemize when filing federal taxes to deduct certain taxes paid to state and local governments. The TCJA capped it at $10,000 per year, consisting of property taxes plus state income or sales taxes, but not both. Prior to the TCJA, individuals could deduct an unlimited amount of state and local income or sales taxes, real estate taxes, and personal property taxes against their federal taxable income.
The MID grants homeowners the ability to deduct mortgage interest paid on either their first or second residence. The TCJA limited the interest deduction to the first $750,000 in principal value, down from $1 million. The mortgage interest deduction is a deduction for interest paid on mortgage debt, and it can be claimed if the mortgage is a secured debt. A secured debt is one in which the homeowner signs an instrument (such as a mortgage, deed of trust, or land contract) that makes their ownership in a qualified home security for payment of the debt.
The limitations on the SALT and MID deductions are slated to expire at the end of 2025. However, policymakers have considered extending them along with the lower tax rates. Critics of the change suggested that it could result in less mortgage participation, hurt the middle class, and reduce the homeownership rate. However, there is little evidence supporting these claims.
The new federal tax law has impacted Westchester, New York, which has some of the highest property taxes in the U.S. The average property tax bill in the county in 2017 was $17,178, with an effective property tax rate of 2.39%. The new tax law caps homeowners’ mortgage interest deduction on mortgages up to $750,000, down from $1 million, and it places a $10,000 cap on state and local tax deductions. For many Westchester County residents, the new federal tax cuts for high-income individuals are expected to help offset their property tax increase through 2025.
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School district services sharing and consolidation are not a primary focus of the CWSSI
In 2019, Westchester County, New York, had some of the highest property taxes in the US. The average property tax bill in the county in 2017 was $17,178, with an effective property tax rate of 2.39%. The county budget for the same year proposed a 2% property tax increase. In 2023, Westchester residents' property taxes remain the highest in the nation, with an average property tax bill of $17,179.
To address this issue, Governor Cuomo introduced the County-Wide Shared Services Initiative (CWSSI) in 2022. The CWSSI is aimed at promoting efficiencies and increasing taxpayers' savings. CWSSI requires governments to convene a shared services panel consisting of the chief executive officer of all towns, villages, and cities. However, school district services sharing and consolidation were not a primary focus of the CWSSI.
Inclusion of school districts in the process is optional, and most counties, including Westchester, did not include school districts in their plans. School consolidation is a sensitive topic for municipalities, and the short timeframe for plan submission may have contributed to its exclusion. While service sharing and consolidation can lead to reduced total employment, some reports suggest that consolidation programs often incorporate a salary equalization process that brings salaries up rather than down.
Despite the potential benefits of service sharing, a common complaint about initiatives like CWSSI is that they push the responsibility for savings onto individual counties and municipalities, even though many of their funding pressures come from state-level unfunded mandates. While Westchester County may find savings through consolidating services at the county level, most services are provided and paid for by local municipalities. Therefore, potential tax savings will likely start with individual villages, towns, and cities, relying on the interest and engagement of their citizens.
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Frequently asked questions
The property tax cap law limits the annual growth of property taxes levied by local governments and school districts to 2% or the rate of inflation, whichever is less.
The property tax cap law helps to restrict the increase in property taxes for residents of Westchester, who have some of the highest property taxes in the nation.
If the property tax cap law was removed, property taxes in Westchester could increase significantly. Before the cap was enacted, school taxes went up on average by 5% annually.
Property taxes in Westchester are affected by factors such as proximity to New York City, employment opportunities, quality of life, and the local tax base. Additionally, the size of the bill depends on whether you live in a city, town, village, or special district, as these have different tax rates.
