Publication Date: Winter 1998
PUBLISHES J-51 REGULATIONS
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.
PARKING CHARGE EXEMPTION
HOMEOWNER ASSOCIATION MEMBERS
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.