Key NYC Property Tax Assessment Tweak 40 Years On

A New York City law designed to improve tax assessments has resulted in massive fines and penalties for thousands of property owners — including the Guggenheim Museum and the Brooklyn Bridge Park Foundation — despite both being nonprofits that are likely exempt from the filings.    

The requirement to file annual Real Property Income & Expense (RPIE) forms began in 1986 as a tool to help the Department of Finance (DOF) set accurate property assessments. The law was tweaked in 2013 to move the due date from Sept. 1 to June 1, create a 30-day grace period after a non-filing notice, make non-filers public, allow one filing for contiguous tax lots operated together, and add penalties for not filing an exclusion form stating the owner was not required to file — such as those that purchased the building during the subject year as well as certain smaller properties.

But over their 40-year history, the RPIE forms have morphed from just a few pages to eight or more, requiring detail more akin to Internal Revenue Service material, with specific forms and pages for various property types such as hotels and garages. Detailed information must be provided for every storefront and lease, and, without express permission from DOF for senior property owners, all the forms must also be electronically filed, with those filing illegible forms subject to additional penalties.

To get an idea of just how cumbersome the RPIE filings have become, DOF issues a worksheet to help those subject to the requirements prepare their filing. In 2024, just the worksheet to prepare the filing ran to 27 detailed, small-print pages — and that’s before the filer gets to the actual RPIE paperwork itself.      

Today, most owners of Tax Class 2, 3, and 4 properties with assessed values as low as $40,000 must file these forms every year. Penalties for failure to file start at $300 and increase with the property’s assessed value. If an owner fails to file for multiple years, the fine becomes a percentage of the assessed value and can be quite hefty, especially as interest starts to accrue.

(Tax Class 3 consists of utility properties, and Class 4 includes all commercial and industrial properties. Class 2 breaks down into 2a for four- to six-unit rental buildings, 2b for seven- to 10-unit rental buildings, and 2c for two- to 10-unit co-ops or condos. Class 2 is for properties with 11 units or more.)    

Properties exempt from the reporting of income and expenses include those that are owner-occupied or recently sold, and apartment buildings with six units or less and one store. If a resident owns residential units and rents them out, they still have to file.

Co-op owners with commercial space up to 2,500 square feet, owner-occupied properties, vacant properties and those where the owner does not know the income and expenses must still submit the “exclusion” form, stating that they do not have to file an RPIE. If they fail to file this exclusion form, they face penalties that begin at $100 the first year, rise to $500 after two years, and reach $1,000 after three or more years. Some properties with an assessed value of $250,000 or less can also file a shorter form.

As DOF has been enforcing the filing requirements more aggressively, many property owners are now facing penalties that have grown to wild numbers.

Brooklyn Bridge Park, a beloved waterfront park run by a nonprofit with a park abatement, is currently facing $3.35 million in penalties and interest for not filing an RPIE for four years for its Pier 2, which hosts pickleball courts and a roller rink among other activities.

Nonprofits must still file the full RPIE if they rent space — which is likely what snagged the Brooklyn Bridge Park Foundation, as it leases to other providers.

The park also has past due balances for fire inspections on another block and lot that has grown to nearly $43,700 with interest since 2017. The organization said it is working with the city on a potential solution.

The luxurious Aman Hotel at 730 Fifth Avenue was recently billed $100,000 for not filing for two years, as was the former Holiday Inn at 440 West 57th Street, now the Watson Hotel, which was most recently used for migrant housing and is now slated for conversion to luxury apartments by Yellowstone Real Estate Investments.

In an email, a spokeswoman for the Aman was unaware of the missed RPIE filings.

While some fines are never collected and sit on the city’s books accruing years of interest, most of these penalties impose a real financial strain on small property owners.

Concerned about the impact on his clients, tax certiorari attorney Ben Williams of Rosenberg & Estis found that 17,851 tax lots failed to file the 2024 RPIEs by June 1, 2025. Although that is a 2.4 percent decrease from the prior year, together those properties combined had a record-high total assessed value of $16.216 billion — up 14 percent from last year.

In 2024, there were 18,794 non-RPIE filers of 2023 income, the highest number in ten years. Their total assessed value was $15.266 billion, the highest in 14 years until it was surpassed this year.

Of the 2024 non-filers, 14,949 properties — almost 84 percent — had an assessed value less than $999,999.

“That’s a remarkable statistic,” said YuhTyng Patka, real estate attorney with Adler & Stachenfeld. Patka believes that the threshold for filing could be increased from $40,000 to $250,000 or even $500,000.

“In my certiorari practice, owners of properties up to about $350,000 in assessed value are the unsophisticated borough mom and pops — a garage or bakery who owns and doesn’t rent — where real estate isn’t their primary business and they’re not paying attention to all the real estate requirements,” Patka said.

In another gotcha, the law also requires an addendum with a rent roll and even more detailed information for properties assessed at $750,000 or more. Patka believes the requirement for the rent roll and addendum should be higher — even higher than $1 million, as these “are not large” properties.

If the new mayor and City Council want to cut regulations that make New York not only less affordable but less business friendly, they could increase the threshold of assessed values required to file the RPIE and addendums while also excluding more properties from the filing requirements.

While the commercial Tax Class 4 included 13,757 non-filers, equal to 73.2 percent, the remainder were mostly residential Tax Class 2 properties: 298 in Class 2C, 867 in Class 2A, 928 in Class 2B and 2,944 other Class 2 properties.

These Tax Class 2A, 2B, and 2C properties are subject to strict assessment caps: Their assessed values cannot increase more than 8 percent per year or 30 percent over five years, regardless of income.

Because of these caps, some say RPIE filings for these properties are largely pointless. That’s because many of these assessments, especially in Manhattan, are raised to the maximum allowed by law nearly every year anyway, Williams explained, making the income data irrelevant. It would be easy to carve these out of the RPIE filing requirements.

As Williams explains, for Tax Classes 2A and 2B, “the city really doesn’t need the forms. Report whatever, and your assessment will go up 8 percent anyway.”

Whether or not properties have their values raised the full 8 percent, yearly penalties for not filing the RPIE can spiral out of control.

The elderly owner of the four-story 714 10th Avenue, a mixed-use building from 1910 with retail on the ground floor and six one- to three-bedroom apartments above, according to StreetEasy, has amassed $149,507 in RPIE penalties just since 2020 for not filing an RPIE. The family bought the building in 1970 for less than $14,000. Now classified as Class 2A, it has an assessed value of $463,748. Its six apartments are technically above three stores, but two of the stores were combined for the family’s own liquor store while the other, on West 49th Street, is used for storage. The yearly property taxes are less than $58,000. When the owner entered a payment plan in May, she owed $230,406. With interest, that has risen to $243,068. She is already falling behind on the payments.   

Building economics can quickly spiral out of control. 

Nearby, the four-story 736 10th Avenue is a Tax Class 2A building with five residential apartments and two stores. It has an assessed value of $675,000, and annual taxes of $83,966. Since 2021, the building has amassed RPIE penalties that, with interest, total $167,198. The owner, Tip Top Tenth Ave Management, is also behind on property taxes, and its $4 million mortgage has been foreclosed.     

Owners of buildings with up to six units are not required to file an RPIE if they only have one store, nor are those with up to 10 apartments and no stores.

Under current city law, most income-producing properties valued over $40,000 must file RPIEs by June 1 each year. 

Once a non-filer list is published, owners who do not “cure” their filing within 30 days face escalating fines and lose the right to challenge their assessment at the Tax Commission the following year.

Although the RPIE law has existed for decades, DOF has historically enforced it inconsistently, and often ignored non-filings. That changed over the last five years as enforcement sharply increased.

A 2016 audit by the New York State comptroller reported that DOF issued $3.4 million in RPIE penalties in September 2010. In fiscal year 2023, DOF collected $21.23 million in RPIE penalties, a number that decreased just slightly to $18.41 million in 2024. 

The city has budgeted $12 million in penalties for both fiscal years 2025 and 2026 — revenue that will largely come from small property owners.

That is because most non-filers are small owners. Nearly half — 48.4 percent — have assessed values under $250,000, almost 70 percent are under $500,000, and nearly 84 percent are under $1 million. This is a burdensome system that could be fixed with simple amendments to the law.

In a hypothetical analysis, Williams estimated that if all the properties on the 2023 non-compliance list failed to file or claim an exclusion, total fines would have reached nearly $47.8 million.

This year, only 41 non-filing properties had assessed values above $25 million and faced the $100,000 maximum fine. 

Several of those owners, including Madison Square Garden, quickly cured their filings to avoid losing Tax Commission review rights or being billed for penalties.

Properties can also land on the non-filer list due to technical issues, such as electronic filing errors, “illegible” submissions, or failure to file the exclusion form — even when no RPIE is required.

Shockingly, even tax-exempt properties have been fined. 

The Solomon R. Guggenheim Museum was billed $100,000 in 2024 for not filing an RPIE. Interest has since pushed that amount to more than $132,000. If the issue is not resolved, the fine will eventually be recalculated as 5 percent of the museum’s assessed value, causing it to balloon further. The museum did not return a request for comment. 

Similar penalties have hit the Brooklyn Navy Yard’s co-generation plant, a 47-unit hotel in Queens, and CSX Railroad, which now owes more than $620,000, including interest. The railroad declined comment, and no one was available at the power plant. 

While some owners may try to hide income from the assessor, most are simply overwhelmed by the volume of city paperwork, warnings, fines and fees. RPIE requirements are buried in tiny print at the bottom of tax bills, mixed in with boilerplate language about other laws that may not even apply. Many owners simply tune it out. 

Compounding the problem, Patka discovered that DOF miscalculated RPIE penalties in 2023 and 2024 using market values instead of “actual” assessed values for certain Tax Class 2 properties, leading to inflated fines. Although credits were issued in 2024, it remains unclear whether all properties and prior years were corrected.

Targeted amendments to the law by the City Council could eliminate much of this burden while still protecting the city’s tax base.

“It’s death by a thousand cuts,” said Patka. “City owners are inundated with regulatory filing requirements, whether it’s RPIE, DHCR, ICAP, CCUs and so on, and each requirement increases the likelihood of a very costly misstep such as a missed filing. While such financial penalties can be easily absorbed by larger owners, the same penalties could be catastrophically expensive for a small property owner.”  

“The city should re-think all of the filing requirements it imposes on owners and consider removing some requirements altogether for small property owners,” Patka said.