Co-op & Condo Property Tax Abatement Dies in Albany – Now What?
(Source: Wikipedia)
June 27, 2012 — The latest from Albany: mixed signals, missed opportunities, and a hope for future change. Those are all the ingredients that go into the co-op and condo tax abatement stew that has been simmering for so long it’s all but evaporated. The short story is that, for the moment, the tax abatement that 360,000 city taxpayers count on each year is dead. The price of burying it? Some $430 million in additional taxes.
The long version of this sad tale goes back 16 years to when the tax abatement was passed as a “temporary” measure, designed to give some relief to co-op and condo owners, who didn’t get the same tax breaks that others received. “It was meant to be a first step,” explained Mary Ann Rothman, executive director of the Council of New York Cooperatives & Condominiums. Co-op and condo owners “were recognized to be paying three to five times as much in property taxes as other homeowners in Class 1, which is for one-, two-, and three-family homes.”
The problem is, it turned out to be the only step. Until now. The state law authorizing the amendment had to be renewed by June 21, the last day the legislature was in session. On that date, the city proposed a wide-ranging bill that called for changes not only in the tax abatement but also in the J-51 (tax benefits for renovation) and 421a (residential building incentives) programs, as well. Since state law requires a three-day waiting period before a bill can be considered – and since Governor Andrew Cuomo would not intervene to waive the requirement – the bill was DOA.
According to Eric Weiss, a tax attorney and partner in Tuchman Korngold Weiss Lippman & Gelles, the city seemed surprised by the outcome, having already prepared and mailed out tax abatement forms for fiscal 2013. Can the city continue the tax abatement on its own? “No,” said Weiss, “it has to come from the state.”
While most insiders were shocked by the outcome – although one professional wasn’t too shocked, saying, “That’s Albany” – many predict that after the November elections, a special session will be called to pass some form of an extension. “We have been advised that the legislature is expected to take up these issues during a special session later this year,” Steven Spinola, president of the Real Estate Board of New York, said in a prepared statement. “We expect that after the special session, a co-op/condo abatement, with very few changes for primary residents, will continue and the J-51 program will be extended.”