New York's Cooperative and Condominium Community
Frank Lovece in Legal/Financial on November 23, 2012
Real Property Tax Section 467-a of the Laws of New York was created as a temporary measure in 1997 to keep co-op and condo property taxes from spiking far above those of single-family homes and others residences in that tax class, and last renewed in June 2008. It expired on June 30 after state lawmakers ended this year's session on June 21 without having taken action on a relevant tax bill New York City had proposed too late for Albany to consider. The expiration threatens to raise taxes by as much as 33 percent on more than 360,000 apartment owners, for a total of $430 million.
Cuomo called the legislature back into session, and Albany announced an agreement reached July 5 to renew the tax abatement. No action was taken, however, and the city's Department of Finance was required to prepare January tax bills under the new, higher rates, retroactive to July 1, 2012.
Word from the Back Room
Then on Monday, an unnamed spokesperson told Crain's New York Business, "The abatement will be applied," specifying that, "The city will send out the bills this month as originally planned [at the traditional rates], and we expect that new legislation will be acted on early in the next legislative session." The following day, the New York Post's website published its own account, identifying DoF spokesperson Owen Stone. No confirmation of his statement has appeared on the DoF website or on other City sites.
The DoF's most recent, undated comment read, "The City is hopeful that the abatement will be reauthorized in some form before the end of this calendar year. If there is no reauthorization this year, we will be required to recalculate your property taxes on a future bill. Without the condo/co-op abatement your property tax liability for fiscal year 2012-13 will increase. If the average assessed value of the units in your co-op/condo is greater than $15,000, your taxes will increase by approximately 21%; if the average assessed value of the units in your co-op/condo building is $15,000 or less your taxes will increase by 33%."
"[T]he tax abatement is vital, and its elimination would surely wreak havoc on the budgets of co-ops, condos, and the middle-class families who make their homes therein," Councilman Mark Weprin (D, District 23, Oakland Gardens, Queens) wrote in ;a letter published Tuesday in the Queens Tribune urging the governor "to call the Legislature into session as soon as possible to address this matter, and Mayor Michael R. Bloomberg to do everything in his power to avoid sending out painfully high property tax bills to co-ops and condos next year."
Likewise, State Senator ;Tony Avella (D, 11th District, Bayside, Queens) this week pushed for Cuomo to issue an executive order preserving the abatements and avoiding what he called an average $1,200 jump in the average co-op / condo owner's annual tax bill.
Representatives for Cuomo and Bloomberg did not respond to requests for comment.
Word on the Background
The state law authorizing its renewal had to be approved by June 21, the last day of the 2011/2012 session. New York City Assembly Speaker Sheldon Silver (D, District 64, Lower Manhattan) had proposed State Assembly bill 10071 on May 2, 2012, with State Senator Martin J. Goldman (R, C, 22nd District) proposed the parallel State Senate bill S07091 on April 27, 2012, each calling for a four-year extension of 467-a. The Assembly bill was read on the floor on May 24. The Senate bill was referred back to local government, and amended and reintroduced on June 17, but not placed on the calendar. Neither was voted on and the bills died.
The City's Independent Budget Office had warned weeks earlier that, "If Albany doesn’t act to reauthorize the tax abatement, roughly 365,000 New York City coop and condo owners could see their property tax bills jump. But if legislators simply renew the existing bill, they’ll be giving far steeper tax breaks to many coop and condo owners than originally intended and costing the city hundreds of millions of dollars in foregone revenue."
While the unconfirmed report appears promising for co-op and condo boards, Albany did not act on a past promise to extend the abatement, and until passage, nothing is certain.
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