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Council of New York Cooperatives & Condominiums
Article Archive
Tax Issues
Published: Spring 1997

TAX ABATEMENTS FOR HOMEOWNERS
IN COOPERATIVES & CONDOMINIUMS

Also see important suggestions for Crediting the Abatement.

Thanks to the efforts of CNYC and the Action Committee for Reasonable Real Estate Taxes, and to dedicated legislators representing our interests here in the City and in Albany and to two City administrations who recognized that homeowners in cooperatives and condominiums are taxed unfairly, relief is now on its way. Pursuant to the terms of Chapter 273 of the laws of 1996, the Department of Finance of the City of New York has been collecting data so that it can provide tax abatements for fiscal 1997, 1998 and 1999 to homeowners other than sponsors in cooperatives and condominiums who own no more than three apartments in the building. The full abatement for fiscal 1997 will be credited against the July tax bill along with credit for the first payment for fiscal 1998.

DATA COLLECTION

To qualify for the first-year abatement, buildings had to supply the Department of Finance with basic information about eligible apartments by October 15, 1996. Additional details could be supplied with the second filing by April 1, 1997. The Department of Finance received information on more than 390,000 apartment units and entered this data into its computers. When discrepancies or deficiencies were discovered, letters were sent to the designated representatives of each building on a form designed to be mailed back with the appropriate corrections. In February 1997, the Department sent a second round of forms to all buildings identified as cooperatives or condominiums. Buildings that had filed in October simply had to provide information about apartments where changes in apartment ownership had occurred from January 5, 1996, to January 5, 1997, or affirm that there had been no such changes. Buildings that had not previously filed had the opportunity to provide complete information on all units in order to qualify for the abatement for fiscal 1998.

BILLINGS

As it did last year, the Department of Finance plans to send property tax bills out early this year to offer property owners a small discount if they pay early. The early billing poses certain problems, which are balanced by the opportunity for savings. A mid-June billing is likely to precede the tax-fixing vote in the City Council. Therefore, the Department of Finance will bill property owners for their July 1997 taxes based upon the 1997/98 tax assessment and the 1996/97 tax rate. Adjustments in the January bill will compensate for variations between the old tax rate and the new.

Condominium unit owners and cooperative housing corporations that have qualified for the tax abatement(s) will find the second-year abatement calculated on the same basis as this early tax bill. During the summer, the Department of Finance will send each building a breakdown of the abatement by apartment; since, at that point, the tax rate for fiscal 1998 will be known, it will specify the correct dollar amount of abatement for each qualifying unit and will not agree with the amount abated on the June bill. Appropriate adjustments will appear on the cooperative's January tax bill.

CNYC suggests that boards begin to credit the abatement to each eligible apartment only after detailed data becomes available (see Crediting the Abatement). It is appropriate to discuss at a board meeting and document in the minutes the way in which your cooperative will distribute the abatement.

LONG-RANGE TAX REFORM

The Department of Finance has been so busy with the abatements that it has not yet complied with the second phase mandated by the legislation, namely to propose a long-term plan to eliminate the disparity in taxation between cooperatives and condominiums and other homeowners. CNYC and the Action Committee for Reasonable Real Estate Taxes will continue to monitor the development of the long-term plan to ensure that it meets the criterion of tax fairness. Once such a plan exists, we will reach out for your support for its enactment into law.

 
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