A Bill Now in front of Governor Andrew Cuomo would impose new requirements on all buildings that receive the co-op and condo tax abatement. To qualify for the abatement, a building would have to either have an average assessed value of $60,000 or less per unit or pay all of its service employees a “prevailing wage.”
Each year, on June 1, the city comptroller releases a schedule of wages and benefits for various professions throughout the city. While many co-ops and condos employ SEIU 32BJ union workers and therefore don’t have to worry about the prevailing wage, those buildings that are not unionized and still want to receive their tax abatements should be looking over their payrolls.
But before you start knocking on your payroll manager’s door, check in with your accountant. The average assessed value of each unit in your building might save you.
For a co-op, calculating this value is simple: check the assessed value of the building and divide by the number of units. This gives you the average assessed value of an individual unit.
In condos, there’s slightly more arithmetic. “You add up the assessments of each [unit],” says Paul Korngold, partner at the law firm Tuchman, Korngold, Weiss, Liebman & Lindemann, “and divide by the number of units. If your average assessed value is $60,010, you have to pay the prevailing wage.”
Qualifying for the abatement may not be enough to justify doing the math, though, says attorney Ken Jacobs, partner at Spolzino Smith Buss & Jacobs. “It depends on how much more you have to pay,” he says. “If a co-op has 15 employees and it’s non-union, adding another $7 or $8 to each employee’s hourly wage could be a major cost. You could wipe out the benefits of the abatement. And we don’t even know if the abatement is going to be extended more than a couple of years.”