PROPERTY TAX ABATEMENTS
CREDITED ON JULY TAX BILL
Property taxes are lower this year for homeowners in New York cooperatives
and condominiums. This is due in large part to the 1996 tax abatement
legislation for which CNYC and the Action Committee for Reasonable Real
Estate Taxes worked so hard. In addition, the tax rate for fiscal 1998
is slightly lower than last year's rate. Intricacies of our legislative
system have brought a certain amount of vagueness to this issue, but clarity
is now beginning to emerge.
Last year, thanks to the efforts of CNYC and the Action Committee for
Reasonable Real Estate Taxes, and to dedicated legislators committed to
tax fairness for homeowners in cooperatives and condominiums, Chapter
273 of the Laws of 1996 was enacted requiring tax abatements to these
homeowners for fiscal 1997, 1998 and 1999.
To determine which units qualified for the abatement, the Department
of Finance devised forms asking for details about apartments and their
owners. Board members and building managers spent many hours amassing
the necessary data, some on computer disk, some on color-coded forms –
green for condominiums and purple for cooperatives. Those wishing to qualify
for the abatement for fiscal 1997 had to complete their filing by October
15, 1996. To qualify or requalify for fiscal 1998, boards were required
to file another form by April 1, 1997.
The Department of Finance spent months processing this data, and it began
crediting buildings with the abatement in June as tax bills were sent
out for fiscal 1998. The Department credited the full abatement for fiscal
1997 on all July tax bills. Homeowners in buildings where unit assessments
averaged $15,000 or less received a 2% abatement, and those in buildings
where unit assessments averaged more than $15,000 received a 1.25% abatement.
1998 TAX BILLS PRECEDED 1997/98
The July property tax bills also included an approximation of the fiscal
1998 abatement, either for the first quarter or the first half of year,
depending on the particular building's payment schedule. Homeowners in
buildings where unit assessments average $15,000 or less are entitled
to a 16.5% abatement this year and those in buildings where unit assessments
average more than $15,000 are due a 10.75% abatement. Because the City
sent out tax bills in mid June, long before the City Council could set
this year's tax rates, taxes were calculated based on this year's assessment
and last year's rate. The City had to wait for appropriate Albany legislation
before it could set the tax rate.
Albany was the scene of a very different legislative session this year.
Debate over rent regulations dominated the entire spring, delaying consideration
of other measures and postponing passage of the State budget for more
than 100 days. Among the laws that had to wait for the budget was one
affecting the distribution of tax shares among the four classes of property
in New York City. Senator Goodman's bill, which capped increases for any
class at 2.5%, was finally passed right after the budget. Only with this
law in place was the City Council able to set tax rates at its August
26th meeting. For Class 2 properties, which include all cooperatives and
most condominiums, the rate is modestly reduced from 11.056% to 11.046%.
ABATEMENT SPECIFICS SENT TO EVERY COOPERATIVE
With a tax rate finally set, the Department of Finance computer was put
to work crunching final detail numbers for every one of the more than
250,000 apartment units that qualified for the abatement, forwarding a
specific dollar breakdown by apartment to the designated contact for each
cooperative shortly after Labor Day. Because condo unit owners each receive
their own tax bills, the Department of Finance will make appropriate adjustments
on the next regular tax bill.
Chapter 273 of the Laws of 1996 makes it perfectly clear that the abatement
must be credited to the units that qualify. In the Spring 1997 issue of
this Newsletter, CNYC made suggestions about the distribution of the abatement.
We suggested waiting for October maintenance bills in order to have the
Department of Finance figures for each apartment. We further suggested
that cooperatives may want to divide the abatement into monthly amounts
to credit on the maintenance bills of each qualifying unit. Since the
abatement goes with the unit, there is no need to seek out individuals
who have moved from an apartment.
ACTION COMMITTEE MEETING WILL ANSWER QUESTIONS
To facilitate the distribution of the abatement, and bring answers to
all questions that cooperatives and their managers may have, the Action
Committee for Reasonable Real Estate Taxes is holding a meeting on the
evening of September 24th at 2 West 64th Street. Assistant Commissioner
Martin Oestreicher and CNYC treasurer Mark B. Shernicoff will provide
answers to your questions. See Coming Events
for details about this important meeting.
LAW PROVIDES FOR THIRD ABATEMENT YEAR
The law provides for a third year of abatements. Homeowners in cooperatives
and condominiums where unit assessments average $15,000 in fiscal 1999
can qualify for a 25% abatement, and those in buildings where unit assessments
average more than $15,000 will be eligible for a 17.5% abatement. Forms
will have to be filed by April 1, 1998. The Department of Finance will
make these forms available in the fall.
Buildings that are already benefiting from the abatement will simply
have to register any apartments where changes of ownership have taken
place. Those cooperatives and condominiums that have not previously qualified
for the abatement will now have months of time to compile and file the
forms for the final abatement year.
LONG-TERM PLAN STILL "IN THE WORKS"
With the massive data processing now under control and the first two
years' abatements identified, the Department of Finance is concentrating
on complying 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 support
in working for its enactment into law. An update will be provided at the
September 24th meeting of the Action Committee for Reasonable Real Estate