Tax Abatement Expiration Could Mean Increased Costs For Some
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A tax abatement that benefits co-op and condo owners may be in danger of expiring. NY1’s Jill Urban filed the following report.Tax abatements come in all forms. There are some for new development, some for capital improvements and ones that are designed for specific types of owners or properties.
But many people are not aware that there is one abatement that’s more inclusive: a credit designed for almost anyone who owns a primary residence in a co-op or condo. You may not be aware of it now, but you should be, because it could soon expire.
“There is currently a law that gives coop and condo owners a 17.5 percent credit abatement, reduction on their real estate taxes to create a parity between them and the owners of one, two, three family homes who pay a lot less in real estate taxes. This abatement may now be in jeopardy,” says Eva Talel of Stroock & Stroock & Lavan.
Talel is a real estate attorney who specializes in co-ops and condos. She says this abatement was put into place back in 1996 to help offset the disparity between co-op and condo owner tax rates and the rates for those who own a standalone house.
It’s up for renewal every few years, and this year, there is much concern among real estate professionals that the city may not include an extension of this abatement in its next budget. The abatement costs the city $500 million, and if the City Council decides to hold onto that money, it could have a big impact on apartment owners and buildings.
“ For condo apartment owners, they will not get a reduction of their tax bill and they will see it. For co-op apartment owners, the building’s taxes will not be reduced by that 20 percent and they are going to have a bigger tax bill to pay. For the buildings themselves, to the extent that they need money for capital improvements and building projects and façade projects, they are going to have to find that in the pockets of their shareholders,” says Talel.
In order for it to be extended, the City Council needs to include it in its budget for June and the state Legislature needs to extend the law itself. Some real estate groups are encouraging New Yorkers to get educated on this issue and to raise their concerns with their local representatives.