A matter of timing. The New York City co-op and condo tax abatement is a welcome financial boon to shareholders and unit-owners whose apartments are their primary residence. In the case of co-op buildings, which receive a single property tax bill and therefore a single tax abatement, the board or management company is responsible for passing along the rebate to qualified shareholders. There are no hard-and-fast deadlines for doing so, but if boards – especially those at self-managed buildings – delay for any reason, there can be consequences.
Giving credit. After a co-op receives its property tax bill in January, the board or managing agent must submit a letter to the Department of Finance (DOF) by Feb. 15, telling the city if a new owner-occupant moved into a given apartment during the previous calendar year. Based on that information, the DOF makes any necessary changes and reissues the corrected abatement. “We usually apply the credits in April or May,” says Michael Wolfe, president of property management at FirstService Residential.
According to Jim Goldstick, vice president of the MGRE division at Charles H. Greenthal, the vast majority of buildings distribute the abatement between March and July.
Who gets what. But what happens if a board waits until, say, December to pass along the abatement and an apartment is sold earlier in the year? In that case, the new owner would not be eligible for the abatement. Since boards often impose an assessment on shareholders that’s equal to the abatement, “you want to be sure that whoever gets the abatement is the one paying the assessment,” Goldstick says.
Off the hook. The good news is that it doesn’t fall on the co-op board or managing agent to make the adjustments. “That’s something that should be worked out between the seller and buyer during closing,” Goldstick says. “Any buyer who does his or her due diligence will know going in whether the co-op will be imposing an assessment, since that information is readily available, and experienced attorneys will make sure to do that. It’s not the responsibility of the co-op or their managing agent to reimburse the seller or track them down.”