Brian James Diary of A New York City Broker: Who Pays the Most Taxes?

Thursday, February 7, 2008

Who Pays the Most Taxes?

By JOSH BARBANEL
Published: February 3, 2008
A TAX collector’s tour of Manhattan might rightfully begin in front of the neo-Georgian town house on East 63rd Street with stately stone pillars and a bowed brick front, a large flagpole protruding from a fourth-floor terrace. Once a private club and later a Catholic school, it is now the home of Ronald O. Perelman, the billionaire who made his fortune buying up troubled companies.
Mr. Perelman’s 40-foot-wide house, bought for about $5 million in 1983 (a few years before he famously took over Revlon), holds the distinction of being the highest-taxed single-family home in New York City. It is valued by the city’s tax assessors at $37.5 million, under new assessments released a few weeks ago, up 15 percent from the year before. The property taxes on it are likely to be more than $213,000 when the new tax bills arrive in July, based on current taxes rates.
While the taxes paid by wealthy town-house owners may seem high to ordinary mortals, they can be phased in over many years and usually do not reflect the current market values. The owners would pay even more if they were not protected by the same provisions of tax laws created to shield middle-class homeowners in the Bronx or co-op residents on Queens Boulevard from onerous tax increases. Without this circuit breaker, Mr. Perelman’s taxes could have been as high as $347,000.
Or a tax tour might reasonably begin instead at Rupert Murdoch’s opulent penthouse apartment, 20 rooms spread over three floors and 8,000 square feet (plus 4,000 square feet of terraces), at 834 Fifth Avenue (64th Street), one of grandest and most expensive co-op apartments in one of the most pedigreed buildings in the country.
One might think it would be one of the highest taxed as well. Mr. Murdoch paid $44 million for it three years ago, a record price at the time, and it is probably worth more today. However, Mr. Murdoch’s share of the co-op’s tax bill works out to only about $55,000, the equivalent of a ridiculously low $625 tax bill on a $500,000 home on any suburban street.