NEW YORK, NY (PRWEB) December 22, 2014
New York City is passing the buck in determining whether co-op and condominium unit-owners are eligible for a property tax abatement, which is available only to those who use their apartments as their primary residence, charges Ira Meister, President and CEO of Matthew Adam Properties, a leading New York property management company.
“The weakness of the city’s attempts to verify eligibility for the abatements has caused it to put the burden on boards and managing agents, which are ill-equipped to verify claims of primary residence,” Meister says.
Since the late 1990s, the city has given tax abatements to residents of co-ops and condominiums. Why? Co-ops and condominiums are assessed at significantly higher rates than single-family homes and the abatement is an attempt to mollify the owners and shareholders of co-ops and condos.
“The impact of the abatement is significant,” Meister says. “There are approximately 365,000 co-op and condo units and the city estimates the abatement saves on average approximately $1,200 per unit.”
Until 2012, all owners of a co-op or condo were eligible for the abatement. With the increased number of investor and foreign-owned pied-a-terre apartments, the abatement was phased out for non-primary residences beginning in 2012 and completely removed for the 2014/15 fiscal year. To determine who complied, the city’s Department of Finance sent letters to co-op and condo owners asking if the unit was their primary residence. The department also checked income tax records and other filings.
A problem arose when many residents did not receive the letter, inadvertently threw it out or just ignored it. Whatever the case, if an application was not filed, the abatement was terminated; a considerable number of qualified co-op and condo owners lost out.
“What did the city do?” Meister asks. “It punted, and now requires boards and managing agents to ascertain eligibility. To accurately determine this, we would need access to an owner’s tax returns which we do not have and the Finance Department does. The other option is to survey owners and rely on their veracity.
“The city’s new procedures put the onus on boards and managers creating a significant amount of additional work in a short time span. The information is due in mid-February,” Meister says. “Even more importantly, it takes certainty out of the process and leaves the door open for owners to obtain tax relief for which they are not entitled.”
Contact: Judd Cohen
420 Lexington Avenue – Suite 300
New York, NY 10170