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Breaking: Governor Cuomo Signs Tax-Abatement Renewal and J-51 Update

Frank Lovece in Legal/Financial on February 1, 2013

New York City

Feb. 1, 2013

"Today Governor Cuomo signed two important bills into law," the Mayor said in a statement this afternoon. "The first piece of legislation revitalizes the J-51 program for the first time in nearly 20 years and will incentivize residential building owners to make improvements on their properties — fixing essential, building-wide systems and improving the long-term stability of buildings. 

"Further, it allows for a more streamlined administration of the program, which will allow for quicker approvals of applications – ensuring that tenants have access to safe, affordable and decent housing for years to come. The bill also restructures the property tax-abatement program for cooperatives and condominiums which expired in July. The new and improved program provides for a fairer system that will include more co-op and condo residents, including 98 percent of the co-op and condo owners outside of Manhattan."

New York City city categorizes co-ops and condos as Class 2 properties, whereas single-family homes, townhouses, most condominiums under three stories and some other residential properties are Class 1 — on which valuations for tax purposes are capped at 6 percent a year. But Class 2 has no tax cap — valuations can increase by triple-digit percentages, as they did in 2011 for some properties before an outcry forced the Department of Finance, which assigns the valuations, to retreat and declare a 50 percent cap. The tax-abatement legislation, which has been renewed several times since being instituted as a temporary measure in 1997, had been regularly renewed until last year, when it was allowed to lapse in June.

The mayor additionally noted Cuomo's signing of a second piece of legislation that "adjusts the calculations the New York City Independent Actuary will use when determining the City’s annual pension obligation. The changes will bring the assumptions used in the calculation more in line with current market and pension expense realities.”

 

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