Council of New York Cooperatives & Condominiums
Article Archive
Financial Issues

Publication Date: Winter 1998

The J-51 program provides tax incentives when buildings make certain qualifying building improvements. The City determines the "certified reasonable cost" of a particular improvement, and, once the building has fully documented that the improvement has been made, the City authorizes recovery of up to 90% of this certified reasonable cost through property tax abatements over a period of about 12 years.

Since its inception in 1954, the J-51 program has been invaluable in promoting the upgrading of the housing stock of this city. Initially, its benefits were available to cooperatives and condominiums only in the first three years after conversion. CNYC was instrumental in extending this eligibility for all buildings whose tax assessments average $40,000 or less per unit and whose sales have averaged below $71,000 per room in the three years prior to commencement of eligible work.

The J-51 program sunsets every six years and must be renewed through State enabling legislation followed by a City Council Local Law enacting the program. CNYC is strongly committed to the continuation of this fine program. It was last renewed in 1993 and remains in effect through December 31, 1999. As legislation is introduced to renew this program, CNYC will ask for your letters of support to ensure its swift passage.

In mid-January, the City of New York published in the City Record regulations for the implementation of the most recent (1993) extension of the J-51 program. Minimal in their innovation, these regulations do expand certain eligibilities and increase the certified reasonable cost for certain improvements.

If your building is contemplating major capital improvements, it is advisable to confer with a J-51 expert to determine whether you can benefit from this program, and, if so, how to proceed most effectively.

A complex set of administrative procedures has grown up around the J-51 program. Designed to ensure that the work is done, and done properly, this bureaucratic structure can sometimes create great frustration. Many buildings and building managers have grown to dread its predilection for examining actual canceled checks - not photocopies, not microfilm from the bank, THE original checks -- sometimes in an audit performed several years after the J-51 benefit is granted. The lesson? NEVER lose track of the actual checks that pay for improvements. ALWAYS keep full documentation on any J-51 improvement through changes of management, changes of attorney, earthquake, frost and flood.

You can get more information about J-51 on the Department of Housing Preservation and Development's Website.


Beginning December 1, 1997, parking charges paid to a homeowners association (including cooperatives and condominiums) by its members are exempt from the New York State 4% parking tax, the Metropolitan Consumer Transportation District's 0.25% tax, and outside of New York City they are exempt from local sales taxes, as well.

To qualify for the exemption, the association itself must operate the parking facility on its premises and the parking charges must be paid to the association by its members. Charges for parking services provided by a homeowners association to persons other than its members remain subject to all state and local taxes.


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