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Tax Issues

Published: Spring 1995

The following article appeared in the Spring 1995 issue of CNYC's quarterly Newsletter. You must be a member of CNYC to receive the complete Newsletter, which features timely articles on issues of importance to cooperative shareholders and condominium unit owners. Click here to reach the CNYC Membership Registration Form.


Insist the City Begin Work Towards Tax Fairness

Formed by CNYC in February 1990 in response to concern over escalating property taxes, the Action Committee for Reasonable Real Estate Taxes has been working for the equitable distribution of the New York City tax levy. It notes that homeowners in cooperatives and condominiums pay three to five times the property tax of homeowners in single-family dwellings of comparable value, and that Class 2 (multiple dwellings) and Class 4 (commercial property), representing 52% of total market value, currently bear 82% of the city's real estate tax burden.

The Action Committee advocates the establishment of two tax classes, one residential and the other commercial, removing all caps, assessing all property at full value, and locking in an effective tax rate between the residential and commercial classes at 1:2. It supports the institution of circuit breakers to ensure relief for disadvantaged tax payers, and a pass-through to renters of a portion of the property tax burden.

CNYC thanks Action Committee Chairman Martin Karp for the following update.

TAX REFORM PROPOSED

Last year, City Council Speaker Peter Vallone proposed a tax reduction for cooperatives and condominiums phased in over 10 years. Mayor Rudolph Giuliani proposed that such a reduction would begin on July 1, 1995. The Action Committee for Reasonable Real Estate Taxes has built its 1994-1995 program around these commitments by maintaining a presence, anticipating the mode of implementation, and being to ready to act when these commitments are honored.

Although the Mayor's 1996 Financial Plan originally included tax relief for cooperatives and condominiums for the fiscal year starting July 1, 1995, he announced on April 27 that he would defer this initiative for a year. At the publication of this Newsletter, neither Speaker Vallone nor members of the City Council had commented on this issue. Your letters, calls, and faxes may help keep this modest reduction in the 1995 budget.

AFFIRM YOUR SUPPORT FOR TAX FAIRNESS

At a recent meeting, the Action Committee voted to support a full-court press to reduce the unfair tax burden on cooperatives and condominiums. At the same time, the Action Committee continues to work for overall reform of the New York City property tax structure to assure fair and equal treatment of all taxpayers.

Your participation is vital to the success of the Action Committee in bringing fairness to the tax system in our city. Your steady barrage of letters and calls to the Mayor, Speaker Vallone, and your City Council representative (all at City Hall, New York, NY 10007) must stress how very important it is to start now to bring fairness to the tax system. Thank the Speaker for the reduction he has proposed for cooperatives and condominiums and ask the Mayor to return to his former position; urge that they not allow this important reduction to be eliminated from the budget for fiscal 1996.

Since the proposed change in tax policy requires amendment of the New York State Real Property Tax Law, please make sure that your Assembly representative and State Senator are aware that the people living in your cooperative or condominium need tax relief. For the names of your representatives, you can contact the League of Women Voters between the hours of 10 AM and 4 PM at (212) 674-8484.

REDUCTIONS OVER 10 YEARS TO BRING
CO-OPS & CONDOS IN LINE WITH OTHER HOMES

There are about 488,000 co-op and condo units in the city, which contribute $1.11 billion to the tax levy. Thus, the average apartment's annual tax bill is currently $2,275. On completion of the 10-year reform program, if all things remain the same, this bill would be reduced to $1,435. By way of comparison, the average tax bill for a Class 1 property is presumed to remain at $1,380. Mayor Giuliani and Speaker Vallone recognized that this is not a revenue-neutral resolution of the tax inequity. But they have also acknowledged how much homeowners in cooperatives and condominiums contribute to the stability and viability of this city, and they understand the need for treating us more fairly.

The Action Committee is currently engaged in projecting the impact of the tax reduction, considering factors such as borough, neighborhood, building type, and so on, both to be able to inform members of the outlook and to be able to influence the legislative proposals. We thank all those who replied to its questionnaire providing information from recent appraisals; your data has been most helpful in our research.

 
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