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Council of New York Cooperatives & Condominiums
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Tax Issues

Published: Autumn 1998

The the current property tax abatement program could end in the spring of 1999. Use CNYC's Sample Letters to urge Mayor Bloomberg to quickly present the promised long-term plan to continue progress towards tax fairness.You can download the letters in MS Word or as a PDF.

Help us achieve tax fairness for homeowners in cooperatives and condominiums by making a contribution to the Action Committee fund.

The Action Committee for Reasonable Real Estate Taxes met on Wednesday, September 16th. Deputy Finance Commissioner Martin Ostreicher reported on tax exemptions and abatements for homeowners in New York City cooperatives and condominiums, and Action Committee Chairman Martin Karp asked participants to push the City to deliver a viable long-range plan for tax fairness.

THIRD ABATEMENT YEAR
Commissioner Oestreicher reported that implementation of the third year of the abatement has gone very smoothly, with 282,400 apartment units in more than 5000 cooperatives and condominiums qualifying for abatements amounting to $156,000,000. Basic data was collected by the department in the spring and entered into the database. Tax notices sent in June were calculated based on the assessments and qualification data for this year, but the tax rate from last year, because the new tax rates were not yet fixed. In August, the Department of Finance sent summary letters to the designated contacts (often the managing agent) of all cooperatives with qualifying units, seeking final corrections of the third-year information.

EXEMPTION PROGRAMS
In addition to the property tax abatement for homeowners in cooperatives and condominiums, the Department of Finance administers the Senior Citizens Homeowner Exemption (SCHE) Program for seniors whose family income is less than $26,900; the Veterans exemption, which became applicable in cooperatives this year; and the statewide STAR (School Tax Reduction) program. The Enhanced STAR program for seniors with a family income of $60,000 or less was implemented this year. STAR is based on a formula set annually by the State. This year, qualifying seniors were exempted from school taxes on $2,910 of the assessed value of their homes, resulting in an abatement of $312.51.

Commissioner Oestreicher noted that the information collected for the property tax abatement program was enormously helpful in enabling the Department to contact individual cooperative shareholders directly to enroll for STAR. Last year, the Department of Finance sent out 900,000 preprinted applications to New York City homeowners in private homes and in cooperatives and condominiums. More than 300,000 responses were received, of which some 170,000 households qualified for the Enhanced Star Program.

DETAILS TO BE SENT ONCE TAX RATE IS FIXED
The City Council and the Mayor have agreed upon property tax rates for fiscal 1999, but, as of October 1998, no formal tax fixing resolution had been passed. Once the tax fixing resolution is passed and signed into law, the Department of Finance will be able to calculate the precise dollar amounts of abatement appropriate for each qualifying apartment unit. Within 10 days, DOF will then send every qualifying cooperative a letter communicating all this information and providing precise dollar amounts for each apartment, listed in four columns for 1) the property tax abatement, 2) SCHE, 3) Veterans Exemptions, and 4) Enhanced STAR. Once you have this information, you will be able to begin crediting the qualifying shareholders with the amounts due to them.

Because the 1998/99 tax rate for Class 2 properties will be lower than it was last year - 10.739% rather than 11.046% - your January tax payments will be lowered to compensate for the slight overpayment billed in the first half of the fiscal year before rates were established.

The STAR Program extends to all New York State homeowners in fiscal 1999/2000, for their primary residences. The exemption is 60% of the Enhanced STAR, phased in over a three-year period. In November, the DOF will mail preprinted STAR application forms to all New York City homeowners who did not previously register for STAR. These applications must be returned by January 5, 1999, for the homeowner to receive the 1999/2000 STAR exemption.

LONG-TERM PLAN FOR TAX FAIRNESS
The Commissioner also said the DOF has experts hard at work on a long-term plan for tax fairness. Action Committee Chairman Martin Karp then pointed out that the New York State legislature is scheduled to meet briefly after the election. Pete Grannis? A.11074 extends the property tax abatement for an additional year at its present rate. This bill was passed unanimously by the Assembly in June, but currently languishes in the Senate Rules Committee. Passage of this important bill during the brief legislative session would allay fears of a gap in tax abatements as work progresses towards a viable long-term tax fairness plan. Mr. Karp urged participants to write to the City Council on this issue and to inject it into the November 1998 election.

 
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