Many residents in suburbs outside New York City want to prepay their 2018 property tax bills in 2017 to reduce their tax liability by thousands of dollars.
Every time he stepped away from his desk last week, the supervisor of the Town of Greenburgh returned to a voice mail message from a resident wanting to know if it was possible to prepay at least a portion of the 2018 property tax bill in the waning days of 2017.
“I’m getting swamped with many, many calls, usually one an hour, from people who want to prepay their taxes,” said the supervisor, Paul J. Feiner, who manages the Westchester County town of 92,000 people about 25 miles north of Midtown Manhattan. “Practically all the officials in Westchester are being swamped with calls.”
The messages were prompted by the passage of the Republican tax plan that caps the federal deduction for state and local taxes such as income taxes and property taxes at $10,000 for 2018. The House and the Senate voted along party lines this week to approve the $1.5 trillion tax bill, and President Trump signed the measure into law Friday.
In wealthier, high-property-tax towns like Greenburgh, nearly all the residential property tax bills are more than $10,000. By prepaying next year’s property taxes now, homeowners are hoping to deduct the payments on their 2017 federal taxes.
On Friday, Gov. Andrew M. Cuomo signed an executive order suspending provisions in state law that might have blocked some residents from prepaying next year’s property taxes.
Mr. Cuomo, a possible presidential contender, said the move was aimed at protecting residents from the “divisive” Trump administration’s tax law that is an “economic dagger targeted for the heart” of New York. It could increase the amount of federal taxes paid by New Yorkers by $14 billion, Mr. Cuomo said during a conference call with reporters.
“This is now red vs. blue. They are using New York,California and the other blue states to finance the tax cuts in red states,” said Mr. Cuomo.
He said some people may think the executive order was designed to “circumvent” the tax bill President Trump just signed.
“You are damned right,” Mr. Cuomo said.
Andrew Eifler, a product manager for a technology company, and his wife, Miranda Eifler, who have a 15-month-old son, plan to prepay some of the $21,000 in annual property taxes on their home in Tarrytown, a village in Greenburgh.
“It could save us $5,000 or $6,000,” said Mr. Eifler.
Suburban residents fear a cap on the deduction will make it harder to do things such as save for college or even sell their homes because the property taxes will no longer be fully deductible. Passage of the tax bill has prompted a mad dash to lock in every bit of savings by prepaying as much of 2018’s property taxes as possible before Jan. 1.
“I’m thinking of the future value of my home and it affects the amount we can put away for college,” Mr. Eifler said.
According to an analysis from the Washington-based Tax Foundation, three counties just outside New York City — Nassau, Rockland and Westchester — have the highest property tax bills in the country, with a median levy above $10,000. A report from Moody’s Analytics also found that homes in Westchester County could see a 10.4 percent drop in value and homes in Nassau County could lose 9.2 percent of value as a result of the tax law.
In Greenburgh, where the average house is valued at $700,000,87 percent of residential homeowners pay more than $10,000 in property taxes.
“The number of questions on this topic has spiked. It’s abnormally high and generally coming from Westchester and Long Island,” said Peter A. Baynes, executive director of the New York State Conference of Mayors and Municipal Officials.
In the Nassau County village of Port Washington North, Mayor Bob Weitzner received so many questions about property tax prepayment that he asked his town clerk to contact state officials for guidance.
Nicole Kaeding, an economist with the Tax Foundation, called prepayment a “valid tax planning strategy.”
“The rush is to prepay for this year to get more of a deduction before the cap is in place,” said Ms. Kaeding.
Marty Abo, owner of Abo and Company, an accounting firm in Mount Laurel, N. J., has received many queries about prepayment of state and local taxes. (The tax law prohibits prepayment of 2018 state and local income taxes.)
Each client is different depending on their income and other factors, but Mr. Abo said everything seems to point to the idea that it makes sense to prepay property taxes.
Under guidance issued to the Town of Clarkstown in Rockland County by the New York State Comptroller’s office in 1985 — the last time state and local tax deductions were at risk — New York residents are allowed to prepay property taxes if the municipal tax collection agency has been issued a warrant to collect the tax levy.
Westchester County collects taxes in April, which means, absent the governor’s action, tax warrants probably would not have been ready in time for residents to prepay 2018 property taxes. The governor’s order allows towns to issue their tax warrants and accept 2018 property tax prepayments through Dec. 31.
“I think they realized that people are really furious,” said Mr. Feiner who had been calling for the changes for weeks but was excited about Mr. Cuomo’s executive order. “We have to act really quickly, and implementation is going to be tough, but I think it will be worth it.”
Alphonso David, the governor’s counsel, said the administration wanted to see the final version of the tax bill before deciding what action to take.
The Hastings-on-Hudson Democratic Committee also passed a resolution calling for action.
“This tax bill is a direct attack on the most precious aspects of the American system of governance. We have to resist,” said Vanessa H. Merton, the committee chairwoman and a professor at the Pace University law school.
Ms. Merton lives in the house her parents bought in 1950 and has seen Hastings-on-Hudson change from a town of factory workers to hipsters and hedge fund managers.
