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It seems that you argue that those who get STAR, and other exemptions are not entitled to obtain their portion of the tax certiorari. Unfortunately, I disagree; if the unit were to change hands and all of those exemptions were gone, the assessed value of the units would remain the same. Your arguments seem to say that, because some people had no exemptions, you are in the obligation to compensate them for their lack of exemption by giving more to them through the tax certiorari refund. You seem to forget that a tax certiorari takes into account the overall assessed value of the property by compared to other property situated in your area.
Well, those who got STAR declared on their IRS forms the money advanced to them in the case of a shareholder. I guess in a condo as well as in a house, the owner only declared their discounted portion to the IRS as their tax burden. Consequently, those with less exemptions or none, delcared their larger payments of taxes as part of their IRS form.
Non-profits pay taxes for property, properties owned by a diplomat as a private citizen of a foreign country may pay taxes; however, the person may not pay income taxes and as a diplomat may enjoy inmunities of several nature. Now, property owned by a foreign country for the purpose of establishing an embassy may be another question. I don't think a residential building has to worry of an embassy in their apartments.
Consequently, consult the tax accountant and get guidelines that are unbiased when distributing the gelt.
AdC
Depending on the size of the tax refund that you got under the tax certiari, the work seems to call for tons of recalculations that might not provide the expected rewards or great difference in refunds between those with abatements and the have nots. You may wish to investigate with one apartment with many abatements and find out how much such an apartment would differ from one with no abatements. If the jobs is worth it, then roll up your sleeves and prepare to work for several nights. This will get you the perfect distribution.
AdC
1--In one building I'm looking at, the refund is 6 figures...not small change, even when split among many apartments.
2--No question, it would take a lot of work to get this right.
3--As to whether it's "worth it," how could you or I--or any elected Board member--legitimately make that call for individual unit owners, all of whom have the right to be treated equitably?
This is why it's such a thorny question.
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I agree with much of your analysis, AdC: assessed value does not change, whether or not abatements are in place. When rate reductions are negotiated, all units benefit going forward from proportionately lower assessments...whether or not their taxes are paid fully, or reduced.
Refunds, however, are intended to return a portion of taxes paid to those who actually paid them. That's why a multi-year tax refund raises interesting practical & ethical questions for an owner who purchased mid-term; as discussed earlier, the issue of whether to share with the seller is best left to the individual owner, his attorney, & his conscience. Where abatements are concerned, however, the questions are much broader, more complex, & must be made building-wide by the Board.
Tax cert attorneys negotiate a lump-sum settlement for a building, based on what the unit owners collectively paid for the period in question. When the Board slices this pie, an equal portion given to owners who paid reduced tax for that period amounts to a WINDFALL, & it comes at the expense of their neighbors. Most owners I know, in most buildings I see, would not consider this fair.
You’re correct that all owners must declare to the IRS taxes refunded…just as they originally deducted taxes paid; this is true regardless of the absolute amount or proportional allocation. And you’re right that tax certiorari considers overall assessed value by comparing to like properties…but that comparison presumes a predictable mix of abatements in other buildings; at the macro level, there’s no discrepancy or problem. It’s when considering individual apartments--which a Board allocating refund monies must do--that inequities arise.
I maintain that Boards which decide to dump refunds into their capital reserves are delivering a windfall to some owners at the expense of others…& that allocating refunds fairly, apartment-by-apartment, is a thorny & difficult task. I remind you that I’ve seen diametrically opposed opinions from tax accountants for buildings in similar circumstances. They can’t all be right.
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