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YOUR HOME; Abatements: To Win, You Have to Play
By JAY ROMANO
IN June 1996, after years of lobbying by advocates for co-op
and condominium owners, the New York State Legislature passed
a law that authorized hundreds of millions of dollars in property-tax
abatements for co-op and condominium apartments
in New York City. The abatement program, designed to equalize
property taxes paid by co-op and condominium owners
with those paid by other city homeowners, was extended last year
for an additional two years.
And while tens of thousands of apartment owners in about 4,900
buildings now receive abatements, which can be as much as 25 percent
of their annual real estate taxes, there are hundreds of buildings
that do not yet participate in the program. And that, co-op
and condo advocates say, could be costing apartment owners in
those buildings hundreds, if not thousands of dollars in tax savings
each year.
''To me, it's heartbreaking that there are still people out
there who are missing out on this abatement,'' said Mary Ann Rothman,
the executive director of the Council of New York Cooperatives
and Condominiums. Ms. Rothman pointed out that only buildings
that file the required application by this year's March 16 deadline
will be eligible to receive the tax abatement for the 1999-2000
tax year. The application, which is typically completed by the
managing agent or by the board, must be filed each year.
''I think it's reasonable to say that taking part in the abatement
program could result in an annual savings of anywhere from $200
to $1,500 per year per apartment,'' Ms. Rothman said. ''But as
the saying goes, 'You've got to be in it to win it.' ''
Ms. Rothman added that information and advice on completing the
application will be available at the council's annual meeting
at 6 p.m. Thursday at the Society for Ethical Culture, 2 West
64th Street.
Martin E. Karp, the chairman of the council's Action Committee
for Reasonable Real Estate Taxes and one of the prime movers behind
the original lobbying effort, said that the amount of the abatement
is expressed as a percentage reduction in the annual property
taxes. That percentage, he said, is based upon the average assessed
value of all apartment units in a particular building. For example,
apartments in buildings with average unit assessments of $15,000
or less are eligible for a 25 percent abatement. Apartments in
buildings with average assessments of more than $15,000, he said,
qualify for a 17.5 percent abatement.
And while it might seem that only very few buildings in New York
City would have average unit assessments of less than $15,000,
Mr. Karp said, this is not necessarily the case. That is because
under current state law, co-ops and condominium assessment calculations
are based upon the same formula used for assessing rental buildings,
a formula that results in a seemingly low per-unit assessment.
In fact, Mr. Karp said, an examination of co-op
and condominium apartment assessments conducted at the time the
legislation was passed indicated that 30 to 40 percent of co-op
and condominium units in the city had assessed values of less
than $15,000.
But some buildings that could file for abatements have not. According
to information provided by the New York City Department of Finance,
out of the 6,500 or so co-op and condominium buildings
in the city, 700 to 800 buildings have never filed applications
to participate in the property tax abatement program. Another
700 to 800 buildings are not eligible, generally because they
are already participating in other tax abatement programs.
''There are several possible reasons why buildings aren't participating,''
Mr. Karp said. ''Some buildings may just not be aware of what
they have to do.'' Boards of smaller co-ops and condominiums that
are self-managed may not know that it is necessary to file an
application for the abatement. Even more likely, he said, is that
some buildings do not file because they believe the information
required on the application will be too difficult to collect.
Errol A. Brett, a Manhattan real estate lawyer, said that the
application asks for basic information about the building itself,
the number of apartments, the number of rooms in those apartments,
the floor the apartment is on, the size of the apartments in square
feet, the number of shares assigned to each co-op
unit, and the name and Social Security number of each unit owner
or shareholder.
''It takes some work to come up with that kind of information,''
Mr. Brett said, but once that information has been compiled, filing
subsequent applications is fairly simple because the city already
has the basic information it requires.
But there is a change in this year's filing requirement that may
make boards who have hesitated to file an application in the past
even more reluctant, Mr. Brett said. He explained that for the
last decade or so, co-ops have been required to file an informational
report with the city listing any sales of units in the building,
along with the sale price and current and former addresses of
the buyer and seller. (Since condo sales involve individual deeds,
these buildings do not have to file sales reports with the city.)
The city used each report, which had to be filed twice each year,
to keep track of the payment of transfer taxes due on the sale
of an apartment. ''Since the report is used only to provide information,
and since the buildings are not responsible for actually paying
any of the transfer taxes, some buildings didn't bother to file
the reports,'' Mr. Brett said.
In past years the transfer tax report and the property tax abatement
were separate, he said, but this year's abatement application
is combined with the transfer tax report. Buildings that have
been filing the required reports merely have to supply an update,
listing sales that occurred from Jan. 6, 1999, to Jan. 5, 2000.
For those buildings that have not been filing the transfer tax
reports, the task is tougher. They will have to provide the city
with whatever information they have on sales in the building between
1996 and this past Jan. 5, if they want to file a property tax
abatement application.
''That may be difficult for buildings that had sloppy management
or that were not very good at record keeping,'' Mr. Brett said.
James Moses, a spokesman for the Department of Finance, said that
while the law allows the city to impose a $100 fine for each report
a co-op fails to file, it is the department's intention
''to be flexible'' with buildings that make a good-faith effort.
Mr. Brett said: ''I think that every board has an obligation to
do whatever they have to do to file because they have a fiduciary
obligation to minimize the tax burden of their shareholders. Being
a board member means more than making sure the halls are clean.''
Correction: March 12, 2000, Sunday
The Your Home column last Sunday, about applying for tax abatements
for New York City co-ops and condominiums, misstated the period
covered by the applications that must be filed by this Thursday.
Applications received up to March 16 apply to the tax year July
1, 2000, to June 31, 2001, not the prior year.
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