New Tax Law May Affect You

On February 1st, Governor Cuomo signed legislation extending the Co-op and Condo Property Tax Abatement Program. This abatement program, which is administered by New York State legislature, is applied in the form of a reduction to a condo’s tax bill or to a co-op’s real estate tax invoice, which is, by law, passed on to all eligible shareholders of the co-op as a credit. Many co-op buildings also implement a capital assessment at the same time the abatement is given; in this way money is raised “painlessly” for the operation of the building or for building improvements.

While the extension is great news for apartment owners, there are important changes to this law that may affect your taxes. The new law states that apartments not used as a primary residence are no longer eligible for the abatement. The law also treats apartments held in Trusts, by an LLC or Corporation as non-primary residences, and therefore not eligible for the abatement. If your apartment falls into either category, your abatement will be phased out over the next two years.

If you received a letter from the NYC Department of Finance (DOF), stating that your apartment is no longer eligible, you may respond to the City if they are in error. Otherwise you will begin to see your tax abatement gradually reduced over the
next few tax periods.

SUMMARY
A. It is important that you review and consider contesting any DOF findings concerning your alleged ineligibility to receive an abatement directly with the DOF. DEPM cannot undertake this task for any resident.
B. For co-ops, DEPM will be posting the tax credits for tax year 2012/2013 in May 2013 following the unit by unit report which we received from the DOF.
C. We will be billing back ineligible credits for co-op units for 2012/2013 pursuant to DOF directives as soon as that information is received. Condo unit owners will have their July 2013 bills directly adjusted by the DOF.
D. The City will phase out the abatement of any Resident who was sent a DOF eligibility application and did not respond to contest the DOF’s ownership
records.
For more information, dial 311 or visit http://www.nyc.gov/html/dof/html/property/coop_condo_abatement.shtml

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The newly extended co-op and condo tax abatement applies only to apartments used as primary residence.

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