How New Yorkers Can Prepay Their Property Taxes

December 28, 2017

Tim Speiss, Partner-in-Charge of EisnerAmper’s Personal Wealth Advisors Group, discusses on how New Yorkers can prepay their property taxes early, according to NY Governor Andrew Cuomo’s tax plan.


Host: Looking to prepay those property taxes as a result of changes in the tax overhaul plan? Tim Speiss is the partner-in-charge of EisnerAmper’s Personal Wealth Advisors Group. He joins us now. Tim, thanks so much for being with us. I guess you’ve got a lot of people calling you to ask, “how do you do this?” So go ahead, tell everybody, how do you do this?

Tim Speiss:

Well, if we’re in New York, which many of your listeners are, many of the municipalities and counties have already been posting warrants, and that’s really the magic here. Warrants need to be posted on websites, to be posted a liability. And that needs to happen in order for taxpayers to first pay taxes this month, but then have it recognized as a bona fide payment. And I have a short list of counties and where they are with respect to this in New York. I mean Westchester is an outlier at the moment. Westchester is asserting it doesn’t have time to do it. But with the executive order of last week that’s exactly what the Governor wants the county to do. The executive order state of emergency was intended to have those municipalities and counties post those warrants.

Host:Now when you say “post those warrants,” are those warrants general in nature or are they then somehow made specific to the individual taxpayer?

TS: The latter. The actual bill that you and I would use and receive. The discussions we’re having now is calling the municipality, try to establish what your liability is. Call your mortgage holder, they might actually have notice of the warrant sent to them; they might have it in their possession already. So those are things to really be doing.

Host:I Is it possible that this is easier said than done because it is also important where the money comes from in order to prepay these taxes?

TS: Correct. So, as many of us know as homeowners, we often make the payment through the mortgage payment and that’s held in escrow directly by the mortgage company, which is why we are proposing that that’s another route. So, you can contact the municipality for the warrant. Remember, if the warrant exists it would have already been issued also to the mortgage holder. So the matter is trying to determine where you send the check.


TS: So it’s deemed a proper payment.

Host:Right. And what I’m getting at in terms of where the money comes from it has to do, for example, if you’re a joint filer. If the money does not come from a joint account, that could be an issue.

TS: I personally don’t think so. I mean, if you’re talking about a joint account holder, the most simple one, husband and wife, if I make the payment, sure, it’s in my spouse’s name as well, but that’s deemed to be a payment, we’re jointly liable, the funds are rather fungible in that regard.

Host:Right, but I’m saying if the funds exist in a single-payer account.

TS: Right, yes.

Host: Okay.

TS: If it’s a single payer account and that single payer is the mortgage holder, that’s, I believe, where you’re going with this, is where your example is going to be critical.

Host: Right. It has to be the same person. In other words, if you are not the mortgage holder, if it’s held in a third-party name or in the name of a spouse – many people for tax planning purposes, they might have already moved it into someone else’s name – the money has to come from that same named account.

TS: Correct, that’s right.

Host:Do you foresee this being a bigger issue in 2018 from people who tried to pay, thought they paid, and aren’t going to get the full deduction because in many cases you’re going to get that warrant or that bill once again in 2018?

TS: That’s correct. We can foresee that kind of confusion. Now, for many of our clients, we get involved in these matters, you know, through our family office practice and so forth. So matching up payments – absolutely. Having discussions about payments that were made, weren’t credited properly – absolutely. They’ll be a number of discussions around this and you’re right, the rest of the week is going to be a state of flux and first, knowing if the liability’s been posted, and then getting it to the right recipient, whether that’s an escrow account, the mortgage company, the actual municipality, all of that will be going on. And, yes, many things will be sorted out or have to be sorted out in 2018.

Host:Is it also the case that if you are, let’s say, in an apartment house or a condominium co-op or whatever, that because those taxes typically are paid on a monthly basis and they are paid from one corporation to another – in other words the managing agent would pay the property tax – that it can be a challenge to even find out how much is the property tax all at once?

TS: That’s correct. We’ve been receiving emails and responding to just those things with co-op boards this week. From a practical perspective, a co-op board… if the 2017 monthly bills as you’re pointing out are going to be fairly the same as 2018, it actually might be easier to send checks in this case. You’re talking about a co-op board, co-op board would have a treasurer.Homeowners, unit holders and so forth could cut checks to that individual person as the treasurer. That actually might be the more easy scenario. But paying 12 months in advance might also be allowed because of the terminal liability, it’s under the agreement with the co-op and the resident –  that’s a bona fide debt, that’s an obligation.


TS: You know, if it’s known now you could pay that in December and have a tax deduction.

Host:Thanks very much. Tim Speiss is partner-in-charge of Personal Wealth Advisors Group for EisnerAmper and, of course, you can follow them on Twitter at – telling us about how to attempt to prepay your 2018 property taxes for that deduction.

About Timothy Speiss

Timothy Speiss is a Tax Partner in the Private Client Services Group and Vice President of EisnerAmper Wealth Planning LLC. He chairs our Asia Practice and is a member of the firm’s community service group, EisnerAmper Cares.