New York's Cooperative and Condominium Community

Habitat Magazine June 2020 free digital issue

HABITAT

LEGAL/FINANCIAL

HOW LEGAL/FINANCIAL PROBLEMS ARE SOLVED BY NYC CO-OPS AND CONDOS

Bills Would Defer Property Tax Payments for Co-ops and Condos

New York City

Property taxes, payment deferral, late penalty reduction, co-ops and condos, coronavirus.
June 10, 2020

An aggressive push by co-op and condo advocates, among others, has begun to bear fruit. Two new bills before the New York City Council would allow homeowners, including co-op shareholders and condo unit-owners, to defer their property taxes during the ongoing coronavirus pandemic, The Real Deal reports.

The first bill would allow owners whose property is assessed at more than $250,000 to put off paying the full amount of their property taxes. To qualify, taxpayers would have to show that they experienced an “unexpected decline” in income for more than 30 days during the period from March 7 to June 30.

Property owners allowed to defer their taxes due July 1 would have to pay a quarter of the bill by Oct. 1 and the remainder by May 1. The interest fee on deferred property taxes would match the interest rate set by the commissioner of finance on underpayments of general corporation tax, which is currently 9%, or about half the usual 19% rate for late property tax payments.

Among the advocates pushing for a property tax deferral is the Presidents Co-op and Condo Council. On April 16, the group’s president, Bob Friedrich, told Habitat: “About a month ago, I sent a letter out to all of our co-ops and to our elected officials, asking them to ask the Department of Finance to give us a 90-day delay on payment of our property taxes, which were due on April 15th. Property taxes are probably the single largest component of every co-op's budget. So in order to maintain liquidity, we cannot send out that first payment for at least 60 to 90 days because we don't know what our receipts are going to be. We're not saying we're not going to pay the taxes. We understand those taxes are due, but by delaying it 90 days, we're hopefully able to emerge at the other end of this pandemic financially sound and with the ability to pay those taxes.”

City Council member Kalman Yeger of Brooklyn called the bill “a start,” but said he has concerns about the interest rate. He compared the city to “loan sharks” and said a better choice would be to waive the interest entirely. “It’s not forgiveness,” he said, “it’s a reduction from the interest that would statutorily be charged.”

The second bill, introduced by Public Advocate Jumaane Williams, would defer property taxes on properties worth less than $250,000, without interest. To qualify, property owners would need to use the property as their primary residence, have experienced economic hardship as a result of COVID-19, and have a combined income of less than $250,000.

The bills are on the agenda for Wednesday’s remote hearing of the City Council’s Committee on Finance, and appear headed for a vote June 18.

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