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Council of New York Cooperatives & Condominiums
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Tax Issues

Published: Autumn 2002

PROPERTY TAX INCREASE LIKELY
Our City and our State are struggling to cope with budget deficits. Revenue forecasts from last spring have proven to be optimistic, making it necessary to seek sources of additional funds. In New York City, the one form of taxation that does not require State approval is the Real Estate Tax, which has for the last decade brought in between $8 and $9 billion, funding almost a quarter of the City budget. At this writing, the City Council has not yet voted a final tax-fixing resolution for fiscal year 2002-2003; billings for July and October were calculated using this year’s assessment and last year’s tax rate, with abatements and exemptions for homeowners in housing cooperatives and condominiums calculated proportionally.

The Mayor has been floating trial balloons, suggesting property tax increases as high as 25%. While it is clear that property owners simply could not sustain an increase of this magnitude, it is equally clear that the Mayor and the City Council will soon agree upon an increase. Appropriate adjustments will then be made to taxpayers’ January and April bills. Most cooperatives have taken some account of this likelihood in preparing their budgets for the year 2003. Condominium unit owners pay their own property tax bills directly, so the budget for condominium carrying charges does not need to address this possibility. At CNYC’s 22nd annual Housing Conference on Sunday, November 17th at Hunter College, accountant Stephen Beer discussed property taxes and other important issues in his workshop on The Budget.

DISTRIBUTING THE ABATEMENT
Condominium unit owners receive individual tax bills where the Department of Finance calculates the property tax exemptions and abatements. In cooperatives, however, there is one property tax bill for the entire building. The Department of Finance makes adjustments for exemptions and abatements for senior citizens, statewide school tax relief (the STAR program) and the property tax abatement program. The law requires that the cooperative corporation distribute the appropriate amount to each qualifying apartment by the end of the fiscal year. To facilitate this distribution, the Department of Finance annually provides to the contact person in every cooperative a detailed chart listing every apartment with the precise dollar amount to which the owner is entitled. This is based upon the qualifying ‘snapshot in time’ when the building updated its information on the 5th of January in the prior year. The STAR program and the property tax abatements go with the apartment, so that the cooperative has no need to track down shareholders who have moved. Veterans and senior benefits are based on the individuals and should be retained if that individual no longer lives in the building.

In recent years, the Department of Finance has provided this information to cooperatives in November, enabling the distribution of the abatement to begin in January. Once a final tax fixing resolution is adopted, the Department of Finance will proceed with the preparation of these letters. At this writing, CNYC expects these letters to arrive in late November or early December. It will promptly alert members if further delay is to be anticipated.

At CNYC’s 22nd annual Housing Conference on November 17, 2002, Action Committee Chairman Martin Karp and Deputy Review Assessor William Spong of the Department of Finance presented an afternoon workshop answering questions about the abatement and exemption programs.

THE CONTINUING CRUSADE FOR PROPERTY TAX FAIRNESS
Since 1990, CNYC’s Action Committee for Reasonable Real Estate Taxes has worked for property tax reform for fair and equitable treatment of all New York City taxpayers. Three times since 1996, acknowledging that homeowners in cooperatives and condominiums pay far more than their fair share of property taxes the city of New York and the State Legislature have supported a property tax abatement program for these homeowners. This abatement program is currently authorized through June 30, 2004, and the city is mandated to work on a long-term plan for permanent tax fairness.

The Action Committee for Reasonable Real Estate Taxes continues to work cooperatively for tax fairness. It has also been very instrumental in facilitating the implementation of the complex abatement program and helping members to understand it. The Action Committee will continue to strive for tax fairness. Member support is vital to its efforts. The Action Committee will meet on Tuesday, January 28, 2003, to analyze the tax assessments proposed for fiscal year 2004 and review the process by which buildings can protest their assessments. Strategies will also be discussed for continuing the crusade for property tax fairness.


 
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