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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