Pandemic Brings ‘Primary’ Residence Into Question

Here’s a new COVID-19 wrinkle for co-op shareholders: leaving the city to avoid crowds and breathe some fresh air might result in an unexpected hit on their property tax bill.

In December, Habitat reported on mysterious missing tax abatements from 2019 that were still causing problems for co-op boards at the end of 2020. What other boards may not be aware of is that they may face similar problems in the 2020-21 fiscal year if shareholders decamp to second homes, vacation spots or distant family abodes for extended periods of time. Why? Because if shareholders spend fewer than 180 days of the year at what they claim to be their “primary” residence, it could disqualify them from certain tax abatements.

“Given the pandemic, residents are coming and going less often, so it’s difficult to determine if they’re actually living in the building or not,” says Michelle Quinn, a partner at the law firm Gallet Dreyer & Berkey. “Keeping track has become more challenging. Did the shareholders come to the building today? Are they living in their summer home? Are they living on their boat?”

Previous methods of demonstrating primary residence, such as the address on a driver’s license, may not be enough to prove where a person has lived for the majority of the year, particularly when most transactions and billing can be done online, without the need to mail a paper statement. According to Quinn, a person’s residence may be established in other ways, such as the location of businesses on a credit or debit card, or even the source of grocery deliveries.

Last year’s general election provided another way to establish primary residence, as the address on a resident’s voter registration is more likely to be where he or she actually lives. While the pandemic may have forced people out of their homes for an extended period, it’s unlikely that the temporary absence changed where they voted. In any case, shareholders who haven’t been home in a while have to indicate that their absence is temporary – and that they still spend more than half of the year in their “primary” residence.