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Council of New York Cooperatives & Condominiums
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Tax Action
TAX ACTION

Published: Winter 2005

Since 1990, the Council of New York Cooperatives & Condominiums and its Action Committee for Reasonable Real Estate Taxes have worked for fair treatment of all New York City taxpayers. The acknowledged disparity between the taxes paid by home owners in cooperatives and condominiums and other New York City home owners has been bridged in part by an abatement program enacted in 1996 and extended three times so that it is now in place through June 30, 2008. The Summer 2004 issue of the CNYC Newsletter celebrated the four-year extension of the abatement program and recapped its history and the role of the Action Committee in keeping this issue before our lawmakers. Profuse thanks were extended to the sponsors of the legislation, Assemblyman Pete Grannis and State Senator Frank Padavan, for ensuring that this extender was signed into law early enough to allow the abatement to continue seamlessly. Earlier extenders had not been passed until much later in the year, forcing cooperatives and condo unit owners to pay full property tax bills in July and October of those years, without benefit of abatement.

The City administration and the City Council have been strongly committed to this program, which provides an abatement of 25% on the property taxes of home owners owning no more than three apartments in a cooperative or condominium where the assessed value averages $15,000 or less per unit, and 17.5% abatements in for home owners in cooperatives and condominiums with higher assessed values.

The abatement program has been significant in mitigating some of the glaring discrepancies in the tax treatment of home owners in cooperatives and condominiums as compared to home owners in one-, two- and three-family homes in property tax Class 1.

The two-tiered character of the abatement program contributes significantly toward further fairness by according a higher rate of abatement (25%) to buildings with lower assessed values. In 1996, when the $15,000 breakpoint was established, it appropriately enhanced the abatements of a significant percentages of cooperatives and condominiums that were the homes of people of modest means. In the intervening years, however, as assessments have increased, many of the buildings originally receiving the 25% abatement have crossed over the mark of $15,000 in average assessment per unit. Unfortunately, this afflicts them with higher taxes at the same time that their abatement lowers to 17.5%. The City Council has explored the possibility of adjusting the abatement equation to rectify this situation. This may be a necessary intermediate step while work continues on a permanent plan for tax fairness.

ABATEMENTS ALONE
CANNOT RESOLVE
ALL INEQUITIES

However, by its nature, this abatement program can only paint with broad brushstrokes. In addition to bridging the huge gap that remains between the treatment of Class 1 homes and home owners in cooperatives and condominiums, there is also the task of correcting large disparities in the assessment of similar cooperatives and condominiums in different parts of the city. This cannot be accomplished through the current abatement program. Rather, it will require a more extensive modification of the property tax system.

The 2004 legislation had required the City of New York to develop a long-term plan for tax fairness. The Department of Finance is reported to be working on such a plan. CNYC and the Action Committee seek to participate in reviewing whatever proposals are put forward.

S.T.A.R. INFO IS
REBATE DATA SOURCE

For the second year in a row, the City of New York has returned to home owner tax payers a refund of up to $400 as thanks for the huge property tax increase that was implemented in January 2003, necessary to the recovery of the City after the events of September 11, 2001. The bulk of the rebate checks were sent out early in October; with smaller groups scheduled to be mailed in November and December. The School Tax Relief program (STAR) provided the data that enabled the City to identify qualifying home owners.
While cooperatives are responsible for updating the information that the Department of Finance uses to process the property tax abatement program for their buildings, individuals must apply for STAR on their own. STAR is available only on one’s primary residence in New York State. Once registered, you will continue to receive STAR benefits each year. To register, call 311 and ask for the STAR program. Seniors with a family income of less than $60,000 can qualify for Enhanced STAR benefits. Recipients of Enhanced STAR must submit their financial information annually to confirm their qualification.

 
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