condo tax abatement

for reference:

ABATEMENT UPDATE
FEBRUARY 4, 2013

Representatives of the Department of Finance met with industry leaders today to discuss the way that the recently enacted changes to the abatement program will be implemented.

Because it is late in the City's 2013 fiscal year which began in July 1, 2012 and ends on June 30, 2013, the changes will be deferred to July 1 , 2013 bills.

April 2013 bills will continue to follow the pattern that the City established in July, giving abatements to all units that qualified for them in the fiscal year 2012 (which ended on June 30, 2012). The Department of Finance will send a letter and chart in February , 2013 telling management how to distribute what has been received.

On property tax bills for July 1, 2013 payment, the Department of Finance will include all changes due for City fiscal year 2013 (which ends on June 30, 2013) as well as those for the first quarter of City fiscal year 2014 which begins on July 1, 2013. Buildings with average assessed values of $60,000 per unit or less will be credited with the full first year of increased abatement on that billing, plus the first quarter of the City's fiscal year 2014 . Units that are not the primary residence of their owners will have their abatement reduced by 50% of what was credited to it for City fiscal year 2013 and will be credited with ¼ of the abatement on each of the bills for City fiscal year 2014, as their abatement is phased out.

In a strong effort to ascertain whether units are the primary residence of their owners, the Department of Finance is checking recipients of the STAR abatement and also reviewing Income Tax records to help with address verification. Additionally, the Department of Finance is writing now to some 122,000 units that don’t appear to them to be primary residences, to give the individuals living there a chance to prove that their coop/condo is their primary residence.

Condo unit owners whose units are not their primary residences should anticipate increased bills in July , 2013 .

Cooperatives with many units that are not the primary residences of their owners --- and most particularly buildings where the bank holding the mortgage takes monthly payments from the cooperative for property tax and water & sewer payments -- should prepare themselves and their lenders for the likely increased payment that will be due in July.

Note that an individual can still receive abatements on up to two additional units in the same cooperative or condominium as their primary residence, but investment apartments in other buildings, pieds-a-terre, etc., will have their abatement reduced by 50% for the first year of the extender (all charged against the July 2013 bill) and by 75% for the second year which begins with that same July 2013 bill. After June 30, 2014, those apartments will not receive any abatement.

The Department of Finance website has a fact sheet on the abatement program, and a form for verifying primary residency will soon be available. Anyone registered for the STAR program has already confirmed primary residency and need not take any further action.

That is what the star program is for no? Why none sense?

In order to implement this and provide full employment for themselves, the Department of Finance will be collecting a lot more information than they have before.

See http://www.nyc.gov/html/dof/downloads/pdf/coop_condo_abatement/condocoopabate.pdf

For each apartment, besides the sponsor-or-primary-residence info, the co-op/condo has to document rooms/bedrooms/bathrooms/shares|PCI/ft². (It already knows PCI and ft² for condos.)

I haven't found anything specifying how co-op ft² are to be measured, but it looks as if we'll someday have a semi-official number, as we do for condos.

why nonsense? coop/condo tax abatement... why no soup for investor units? The cost of ownership goes up, rents may go up, or if not, investment becomes less valuable.

we've got to sell mortimer... selllllllll

> investment becomes less valuable.

so what?

sucks, but understandable. resident owners will have to get some sort of credit in maintenance.

so what?

I see... work hard, someday you could have an investment. See how it feels when someone decides to make it worth less. Or, dont. who cares. eat from the hand of robin hood your whole life.

understandable? No, I do not understand.

Not sure why status of residence should change the value of ownership, or result in variable taxation. Whichever. I'm out. enjoy the rent control but not on my dime.

Can someone clarify one thing for me? This change will or will not change the status of condos with 421g or 421a abatements?

They don't change.

> I see... work hard, someday you could have an investment.

real estate is a dubious investment, there are better options. wise up, somebody is going to have to pay for local pensions and those are real estate owners. you will enjoy a much better tax treatment if you retain liquidity of your investments imho.

come on notadmin, its not my only investment, but part of a portfolio. but the original question was more around the question of property taxes being applied based on use, not whether real estate is a wise investment.

yes property taxes are used to pay for things, and as an investor, I accept that there are property taxes. But what is the deal behind making people who own coops/condos, but do not live in them, pay more in property taxes?

I do not understand the basis for this, nor do I understand the longer-term thinking. discourage investment....

STAR isn't even applicable to those with household income >$500k. How many people have investment properties in their portfolios and are making less than $500k?

This is the condo/coop abatement which is much larger than STAR.