'We want a refund': New York City homeowners claim they're overpaying taxes

NEW YORK (WABC) -- While Mayor Zohran Mamdani is taking new action to "tax the rich" on their second homes in New York City, some everyday New Yorkers say they've been overpaying their property taxes and having trouble getting refunds.

Those affected, people who live in condos and co-ops throughout the city, say it's adding up to millions of dollars citywide, and one thing is clear; they want their money back.

Owners tell Eyewitness News the cash-strapped city is making it difficult to obtain that refund after overpaying their taxes for years.

"It's huge, we were all shocked," said Ellen Silverman, who lives in a landmarked co-op building on the Upper West Side.

"We live in a building that's over 100 years old, so there's many you know..." said Silverman, referring to building maintenance. "The upkeep is immense."

Silverman says that while having improvements done to the building, the co-op board hired an architect to recalculate the square footage.

"We found out there was a discrepancy in the square footage, which was that it's actually 22% less than the Department of Finance has recorded," she said.

Why does the size matter? The city uses a complicated formula, based on the amount of livable square footage, to determine how much each building pays in property taxes.

"Just do the math, it's over 40 years that the building has been overpaying its property taxes. It's millions of dollars," Silverman said.

In 2023, her co-op board submitted what's called an "Administrative Review Application to Correct an Assessment or Tax Due to a Clerical Error or Error in Description" to the Department of Finance. It's more commonly referred to as a "Clerical Error Report."

The city then changed the amount of square footage from 119,228 down to 93,759. Records show it was fixed moving forward.

"We're just incredibly frustrated," expressed Silverman.

She says the city denied the building's request for a prorated refund for the previous six years, which is all that's allowed by New York City.

"When you overpay, a store gives you your money back, and we would like the same," Silverman said. She's not alone.

The same thing happened at Andrew Cavagnaro's building on the Upper East Side, and he says the issue has been around for a long time.

"Decades," said Cavagnaro.

The building's square footage was overestimated by more than 10,000 feet. A Clerical Error Report was filed and changed from 148,031 to 137,852 square feet.

"They made rules, we follow them and they're not following their own guidelines," Cavagnaro said.

However, his building got a refund, but only a two-year refund.

"An error was identified, so those six years should be paid in full," said Cavagnaro.

Stan Russo is a property tax consultant and processes Clerical Error Reports for multiple buildings in New York City.

"I cannot remember the last time they gave a refund to a building that I've been involved in," said Russo.

He says he analyzed hundreds of buildings and feels the problem is widespread.

"I believe that 70% of condos and cooperatives have their square footage overstated," Russo said.

But he also claims the city is making it more difficult for building residents to get their tax money back, or at least credited to future payments.

Last year, the city reduced the amount of time eligible for a refund from six to three years, if it's granted.

"They're just not going back and giving any refunds," Russo said. "A lot of jumping through hoops to get nowhere."

It's money that the residents say could be used to fix up their aging buildings.

"I don't know what happened, but essentially, they just said they're not going to give back refunds anymore," said Russo. "They deem it a windfall for the client to get refunds back, yet they don't deem it a windfall for them to overtax."

7 On Your Side Investigates reached out to the city's Department of Finance for answers and requested an on-camera interview.

They declined, but sent us a statement saying, "We encourage property owners who disagree with DOF's property valuations to appeal to the Tax Commission."

The tax commission would not respond to our repeated request for comment and questions. Mayor Mamdani's office didn't respond to multiple requests over the past month either.

"It leaves us frustrated because there's no one to call. There's no one to explain things to us, and there's no one to work with us on making things right," Cavagnaro said.

Meantime, there are more than 7,000 condo and co-op buildings in the city. Cavagnaro, Silverman, and Russo say they're now trying to work with local and state lawmakers to get some answers.

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