Council of New York Cooperatives & Condominiums
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Tax Issues

Published: Summer 1996

Legislation Provides Abatements & Requires Permanent Plan

Overwhelming recognition of the unfair tax burden placed on homeowners in cooperatives and condominiums has produced legislation that begins to redress this inequity. Even as they faced severe budget austerity, both the city and the state acknowledged the urgent need for progress towards tax fairness. Thus, on Tuesday, July 2, 1996, Governor Pataki signed into law State Assembly bill A10588-A and State Senate bill S6628-A mandating property tax abatements for homeowners in cooperatives and condominiums for fiscal years 1997, 1998 and 1999, and requiring the City of New York to devise a plan for long-term tax equity by the end of this calendar year.

In early August, the city's Department of Finance sent forms to all New York City cooperative and condominium buildings to identify the homeowners entitled to this abatement. These forms must be filed by October 15, 1996, to qualify for the first abatement, which will appear as a credit on July 1997 tax bills.

For six years, the Action Committee for Reasonable Real Estate Taxes has crusaded for fair and equitable property taxes for all New York taxpayers. Since 1993, when Mayor Dinkins' commission on property tax reform concluded that very real inequities do indeed exist in the present tax structure, support for tax reform has been growing. Mayor Giuliani twice presented executive budgets with funds earmarked for property tax abatements for homeowners in cooperatives and condominiums. The City Council has been staunch and vigorous in support of this concept, insisting this year that tax reform remain a top priority. When it became clear that very limited funds could be made available at this time, it was agreed that no more than a modest $8.5 million could be used to reduce 1997 taxes. But this grows to $70 million in fiscal 1998 and $120 million in 1999. Equally important is the requirement of a long-range plan to continue to resolve the tax inequities.


On Wednesday, June 11th, based on priorities set by Speaker Peter Vallone and in agreement with Mayor Giuliani, the City Council voted to send the cooperative and condominium tax reform legislation to Albany in the city's Home Rule Message. On Thursday, Assemblyman Pete Grannis orchestrated unanimous passage by the Assembly. Opposition suddenly appeared as the legislation moved to the Senate. But, thanks to the strong support of Council Speaker Vallone, backed by members of the City Council and the Council Finance Division, Senator Goodman was able to secure passage on Friday, June 14th, and the bill joined many others on the Governor's desk. A July 8th press release confirmed that the bill had been signed. The provisions of the legislation are summarized in the chart on the right.


With this law in place, the first stage of the efforts of the Action Committee for Reasonable Real Estate Taxes to bring tax fairness to this city has been successful. But much work remains.


The first step is to insure that every building registers to benefit from the abatements. The Action Committee hosted a series of meetings on August 20th and 21st where Finance Commissioner Alfred Cerullo III and members of his staff fielded questions about the data collection forms. The Commissioner announced that he was extending the filing deadline to October 15, 1996, and that electronic filings will be permitted if they follow the specifications available from the Department of Finance (DOF). Furthermore, for the 1996-1997 fiscal year DOF is not requiring that details about all information be included at this time. Basic data about the building must be provided on one general form, and then for each unit. The city needs each unit owner's name, address, social security number and number of shares held. These forms must be filed by the building (not the individual homeowner). Forms have been sent to every cooperative corporation and condominium association by the DOF. Additional copies can be obtained from borough offices of the DOF or by calling TAX FAX from a telephone connected to a fax machine. Dial (718) 935-6114 and follow instructions. When asked for the code, respond 371 for condominium forms and 372 for cooperatives. DOF will use the information it receives on these forms to provide a tax credit for fiscal 1997 for all eligible buildings on their July 1997 tax bills. The filing deadline to be eligible in fiscal 1998 is April 1, 1997. Buildings that presented completed filings this fall will simply have to confirm that there have been no changes, or present data on the few apartments that change hands in the interval. Buildings that presented partial data in October must complete their filings by April 1, 1997.


As the city undertakes the difficult task of developing and implementing the long-term solution to tax equity, the Action Committee will do its best to insure that this plan addresses the needs of all New York taxpayers. Once developed, this plan will have to be endorsed by appropriate parties and enacted into law. The Action Committee will count on the continuing support of its members to help make this happen. Every cooperator or condominium unit owner who wrote letters or made calls to government representatives, or attended Action Committee meetings, helped pave the way for tax reform. Your continued support will be most appreciated. Contributions can be sent to the Action Committee, 250 West 57th Street, New York, NY 10019.


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