Demystifying village property taxes

The old joke, “Nothing is certain in life but death and taxes,” isn’t so funny when village property owners examine their property tax bills.
But a little knowledge about how taxes are calculated can be reassuring, especially with clarifications from Hempstead Village Treasurer Joe Gill.

Calculating the Property Taxes
If the line on the bill that reads “Total Taxes and Assessment” shows a larger figure than the year before, the property owner might go to the village tax assessor’s office to “grieve my taxes.”

Actually, “What the property owner would need to ‘grieve,’ or challenge,” said Gill, “is the assessed value of the property — the dollar amount of the property’s value.”  

But — the Taxable Assessed Value on the tax bill might seem strangely unrelated to today’s real estate market. 

For example, the Taxable Assessed Value of a single-family house with five bedrooms on an 80 X 100-foot lot might be $7,350. Yet it would sell for many times that amount today. 

“The reason,” said Gill, “is that, as the basis for calculating taxes, Hempstead Village must use figures from an assessment of village properties that was done in the 1930s. The Taxable Assessed Value is expressed in 1930s dollars.”

New York State partners with the village to help property owners understand their assessed value, Gill said. Each year, the state calculates an “equalization rate,” also called a “uniform percent of value,” to convert the 1930s figure to today’s dollars.

The converted figures appear in a PDF document titled “2024 to 2025 Final Assessment Roll,” published on the village website. A property owner can open the PDF, click into it, hit Control-F (Ctrl-F), and type the property name into the search box that comes up. The document will scroll to the right place. The “Full Mkt Val” is the Estimated Full Market Value based on the uniform percent of value.

The Estimated Full Market Value also appears on the village property tax bill.

If no physical changes have been made to the theoretical house and land during the past year (such as adding a room to the house or buying an adjoining lot), the Taxable Assessed Value remains the same. If it was $7,350 last year, it’s the same this year. 

Ideally, the owner’s tax bill would stay the same, too. 

“In reality,” Gill said, “nothing stays the same from year to year.”

Property values can fluctuate. Suppose the theoretical house is demolished in a fire. The property would lose value. Its tax burden would then be lowered. But the village still has to meet its budget through the property tax levy.

“Slightly higher taxes would have to be collected from the rest of the properties in the village to make up the difference,” said Gill.

Once the theoretical house is rebuilt, the value of that property would rise, and the property would assume a bigger share of the tax levy. 

“So,” Gill said, “the increase in value after the rebuilding has the opposite effect — slightly lowering taxes on the rest of the properties in the village.”

Changes in a village as populous as Hempstead happen constantly. A thriving new business, for example, would add value to the lot it occupies. The business would pay property taxes and share the burden of meeting the village budget (tax levy). 

Don’t Fear Increases in Property Taxes
New York State laws have legal limits that prevent sudden, steep property tax increases. Those limits could only be changed if the village board voted to do so after a public hearing.

Other Funding Resources
The village has other resources for meeting big expenses. One is government aid, such as the American Rescue Plan Act fund that is helping to pay for the new Department of Public Works trucks and for the upgrade to Mirschel Park.

Another resource is usage fees

“Water and sewer expenses have never been handled through village property taxes,” said Gill, “but rather, through water usage rates paid by property owners.”

Two major water and sewer projects are being handled in two main ways: government funding and a water rate increase.

For the extensive upgrade of Hempstead’s sewer system, the village board applied to the state Environmental Facilities Corporation. The state approved a $12 million grant plus a reduced interest rate to borrow the other $14 million.

For the $50 million rebuilding of the water treatment plant, which must comply with New York State’s recently revised standards, especially regarding the chemical called 1,4 dioxane, the water rate increase enables the village to undertake the debts that the rebuilding will incur.

For more information about the village budget for this year, download the PDF file “2024-2025 Adopted Budget” from the village website, VillageofHempstead.org. 

In fact, many informational PDFs are to be found on the village website, including those that concern the reassessment of village property values that is happening now.