Co-op and condo buyers – and renters – have seen some tantalizing incentives as the supply of new apartments has outpaced demand in recent years, but here’s a new one: no new taxes, at least for a while.
A 13-unit condo project in Williamsburg, Brooklyn doesn’t benefit from government-sponsored tax abatements – so the sponsor is offering an abatement of its own, Crain’s reports. At 62-66 North Third Street, the sponsor if offering to pay up to two and a half years of the buyer’s property taxes on any unit that goes into contract by the end of the month. The payments, which will be offered as a credit at closing, range from $23,000 on a one-bedroom apartment to $80,000 for each of the two penthouses, according to documents filed with the state attorney general’s office.
“It’s a checklist item,” said David Dweck, principal at Duke Equities, a developer of the project along with Flatiron Real Estate Advisors and MJM Contracting. “People say, ‘I won’t go into anything without a concession,’ because they’re really thinking long-term.”
Considering the looming shutdown of the L train, a vital link to Manhattan, the market in Williamsburg is doing well. Buyers seeking hipness and affordability relative to Manhattan are snapping up homes faster than they can be listed for sale, pushing prices ever higher. But as values rise, so do concerns about costs associated with homeownership – something that’s come into sharper focus now, with mortgage rates at a four-year high and new federal rules limiting deductions for loan and tax expenses.
“People plan some degree of flexibility around what they can pay, and the recent rise in mortgage rates has eaten into a lot of that,” said Grant Long, senior economist at listings website StreetEasy. “That makes having a property-tax abatement much more valuable.”
Thousands of condo buyers in Brooklyn have benefited from state-funded abatement programs such as 421-a, which rewarded developers with tax breaks for up to 25 years – passed on to buyers – in exchange for building or financing affordable housing. That program was replaced last year with a more restrictive one that essentially makes the next wave of high-end condos ineligible for such incentives. Consumers, though, are still conditioned to seek them out.
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