If at first you don’t succeed…
Days after the state legislature shot down a pied-a-terre tax on wealthy absentee homeowners, two state lawmakers have proposed ending the cherished property tax abatement for the top 10 percent of co-op and condo owners – then diverting the $170 million in revenue to the New York City Housing Authority, City Limits reports.
Assemblyman Robert Rodriguez and Senator Brian Kavanagh, both of Manhattan, have proposed a bill, A7092, that would eliminate the 17.5 percent tax abatement for co-ops and condos that have a tax assessment (not a market value) of $200,000 or more. Noting that the abatement is up for renewal in Albany this spring, Rodriguez said, “We think this is a really important opportunity to reevaluate what we’ve given to the top 10 percent of owners, who clearly don’t need it.”
The abatements were instituted in 1997 as a way of softening a tax disadvantage for co-op and condo owners. This fiscal year it totaled $572 million in tax relief. Many co-op boards assess shareholders for the amount of their personal abatement, then put the money in the co-op’s coffers to defray expenses. The prospect of losing this vital revenue was, predictably, not welcome news to co-op and condo advocates.
“It’s crazy,” says Paul Korngold, a partner at the real-estate law firm Tuchman, Korngold, Weiss, Liebman & Lindemann. “It’s a terrible idea. Since most boards assess shareholders for the amount of the abatement, buildings are going to lose 17.5 percent of their budgets. It’s going to drive up the cost of maintenance like crazy. The value of apartments will go down. Tax revenues will go down. It’s a self-fulfilling prophecy of doom.”
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