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Council of New York Cooperatives & Condominiums
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Tax Issues

Published: Winter 1995

The following article appeared in 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.

The ACTION COMMITTEE FOR REASONABLE REAL ESTATE TAXES is working to bring fairness to New York City's property tax system. You can help by making a contribution to the Action Committee fund.


ACTION COMMITTEE
LEADS THE CRUSADE
FOR TAX FAIRNESS

The Action Committee for Reasonable Real Estate Taxes was formed by CNYC in February of 1990 in response to concern over escalating property taxes. Noting 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 New York City's total Market Value, pay 82% of the city's property taxes, the Action Committee has worked tirelessly to increase awareness of these startling facts and to bring equity to New York City's property tax system.

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 instituting of circuit breakers to ensure relief for disadvantaged tax payers, and pass-through to renters of a portion of the property tax burden.

CNYC thanks Martin Karp, chair of the Action Committee for Reasonable Real Estate, for the following report on the new City budget:

First Step Towards Tax Fairness for Co-ops and Condos

The agreement on the NYC Fiscal Year 1996 Budget and the related action to set real estate tax rates has changed the outlook for tax reform, reviving hope for significant reform. Despite the urgent need to close budget gaps, the Mayor and the City Council have followed through on their promises of relief for homeowners in cooperatives and condominiums.

Early in the spring, the Mayor proposed to reduce the taxes paid by homeowners in cooperatives and condominiums by $70 million, beginning a 10-year incremental phase-down designed to bring cooperatives and condominiums in line with Class 1 homeowners. No explanation was offered as to where this money would come from.

In June, City Council Speaker Peter Vallone proposed a moderate tax-rate increase on one-, two-, and three-family homes that are rented. This astute measure would have raised revenue exceeding that required for the proposed start of the co-op and condo tax decrease. But the Mayor was quick to reject this proposal and soon announced a postponement of the decrease, as well. In the end, however, the Mayor and City Council were able to agree on a budget that caps the increase in tax shares for all residential property at 2.75% and includes a $17 million reduction of co-op and condo taxes scheduled to be implemented in 1996. It appears that this will be the first quarter of the previously deferred $70 million; state legislation is required to implement this reduction.

Affirm Your Support for Tax Fairness

Your participation is vital to the continued success of the Action Committee. Your steady barrage of letters to the Mayor, Speaker Vallone, and your City Council representative (all at City Hall, New York, NY 10007) will continue to remind them how very important it is to bring fairness to the tax system. Thank them for the promised reduction in cooperative and condominium taxes and insist that they work for requisite implementing legislation. Since this 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 this tax relief.

 
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