Lax inspectors have cost the city nearly $2 million in tax revenue by mistakenly classifying business properties as “vacant” land, an audit by Comptroller Scott Stringer claims.
The screw-ups led to property owners paying tens of thousands of dollars less in taxes than they should have, the audit said. The tax difference in one botched case hit six figures.
The audit found the city Department of Finance had failed to properly inspect or misclassified 281 properties for tax purposes from 2011 to late 2013, costing the city $1.73 million in revenues.
Class 1 residential property is assessed at 6 percent of market value, while commercial property is taxed at 45 percent of market value.
In one case, the owner of a Brooklyn stone-and-masonry company was undercharged $105,000 in taxes because the four lots on which his business sat were classified as vacant.
Most of the cases involved parking lots or storage yards, the audit found.
“DOF needs to enhance the procedures to ensure that all vacant lots are properly classified,” Stringer said.
Finance Commissioner Beth Goldman agreed with the audit’s recommendation to fix records and improve inspections but called the $1.73 million figure “overstated.”