Published: Summer 1999
Help us achieve tax fairness for
homeowners in cooperatives and condominiums by making a contribution
to the Action Committee fund.
The Action Committee for Reasonable Real Estate Taxes has been pressing
for property tax fairness since 1990! In 1996, at the request of the City
Council and the Mayor, the State legislature passed a three-year abatement
program for homeowners in cooperatives and condominiums and mandated that
the City produce a long-term plan for tax fairness. To date the City has
not produced a long term plan, but it clearly favors continuation of the
abatement until a long term proposal can be developed.
In May 1999 came a devastating blow when the State legislature abolished
the commuter tax, tearing a $380 million dollar hole in the city budget.
As the Mayor and the City Council hurried to craft a new budget for fiscal
2000 without revenue from commuters, CNYC learned that the abatement might
be in jeopardy. We quickly asked members to tell Mayor Giuliani and your
City Council representatives how important it is that the co-op/condo
property tax abatement be maintained. Our appeal was heard, and the budget
passed on June 7th, provides for the abatement to continue at the same
rate as in fiscal 1999.
With this budget passed, three steps remain before the abatement can
be distributed to qualifying homeowners in New York city cooperatives
and condominiums: 1)State legislation must be passed authorizing the extension,
and 2) The City Council must set the tax rate, and 3) the Department of
Finance must ascertain which homeowners qualify for the abatement.
ESTIMATED TAX BILLS IN JULY
Because the fiscal year begins with the July 1, 1999 tax payment, tax
bills were sent out in mid-June. The co-op/condo abatement could NOT be
included because requisite State legislation was not yet enacted. For
this billing, the Department of Finance applied last years tax rate
to this years assessment. The July bills did reflect STAR, SCHE
and veterans exemptions. January bills will be adjusted to reflect the
full co-op/condo abatements.
EXEMPTIONS ARE INCLUDED
The state School Tax Relief Program (STAR) takes effect for all New York
State residents in fiscal 2000. If your cooperative or condominium is
your primary residence, and if you filed the appropriate forms with the
Department of Finance, you will receive the first of three years of escalating
School Tax exemptions. Senior citizens with family income of $60,000 or
less already received the full STAR exemption beginning last year. Property
tax bills also include exemptions for the Senior Citizens Homeowner Exemption
(SCHE), which requires an income of less than $27,900, and for qualifying
LEGISLATION TO EXTEND THE
The Citys Home Rule Message to the State legislature should ensure
passage of the requisite legislation in Albany. Assemblyman Pete Grannis
A.4486-B had paved the way for this extension, but debate still raged
as this Newsletter went to press.
Once legislation is passed by the Senate and the Assembly and signed into
law by the Governor, the Department of Finance will be authorized to collect
eligibility data for the fiscal 2000 abatement. In March, DOF contacted
all the cooperatives that had participated in the initial abatement program
to update their records for fiscal 2000. Cooperatives that filed this
form by the April 15, 1999 due date are registered for the abatement;
they will not be contacted again, as their information is already in the
DOF computers. During the summer, H.D.F.C. cooperatives that are newly
eligible for the abatement, other cooperatives which have not filed in
the past, and condominiums will be given the opportunity to register for
the abatement for fiscal 2000. Bills for January tax payments will be
adjusted to reflect the full year of abatement.
Once the City Council fixes the tax rate, the Department of Finance will
accurately calculate all exemptions and abatements and communicate them
to the taxpayers. In condominiums, each unit owner will see this adjustment
on the January bill. In cooperatives, where exemptions and abatements
are applied to the tax bill for the entire building, the Department of
Finance will send each buildings contact person (often the managing
agent) a detailed unit-by-unit list of the precise dollar amount of credit
due to each apartment owner (November is the target for this letter).
The cooperative must distribute these amounts to the appropriate shareholders
before the end of the fiscal year (June 30, 2000).
Note that both the property tax abatement and the STAR exemption go with
the apartment based on its qualifying on the January 5th record date.
However, the SCHE and Veterans benefits go with the individual;
if the senior or the veteran should leave the apartment before the end
of the fiscal year, the remaining dollars revert to the City. For this
reason, cooperatives should be careful not to distribute the full exemption
benefits too quickly.
Since co-op and condo abatements will not be reflected on the billings
for the first half of the fiscal year, some lenders may seek increases
in the escrow payments they collect for property taxes. Resist this increase;
explain to the lender that the property tax abatement has been included
in the City budged and that it will be applied to your January bill. Meanwhile,
it is appropriate to acquiesce to an adjustment to meet the July and October