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.