NYC Tax Abatement Secure in 2012
Condo and co-op owners can breathe easy; the 17.5 percent abatement on real estate taxes will still be coming their way this year. While it seemed as though the tax reduction was in danger of expiring a few months ago, city officials have decided to keep the abatement in the budget for the 2012 fiscal year. However, this could change in years to come, as the future of tax breaks for Manhattan apartment owners could face alterations.
In New York City, people owning property in Residential Class 2 structures - condos and co-ops with more than three units - are provided with a 17.5 percent abatement to aid in offsetting tax law disparities. Specifically, this subsiding counterbalances any inconsistencies that charge a higher tax rate for Manhattan co-op and condos than for stand-alone homes.
While the 17.5 percent abatement is slated to be in the budget for the coming tax year, there are two proposed bills that may affect future tax reductions for co-op and condo owners in every Manhattan neighborhood. One of the bills would extend the law through 2016, keeping the abatement at a 17.5 percent rate through 2016. The other bill is city-sponsored, and would make the abatement applicable to only primary residences, while limiting it to a $100,000 tax value. If the latter is passed, abatements for condo and co-op owners will be reduced depending on the apartment’s value; this will create heavy impacts on Manhattan condo owners, most of whom already pay exceptionally high taxes. In particular, boards will have to broaden their resources for extra money for maintenance and home improvements.
While these changes would put several condo and co-op owners on edge in years to come, those who live in apartments with low real estate tax evaluations will get a 25 percent abatement following the 17.5 percent reduction. As of now, a concrete vote is on the horizon, as both bills are pending with the State Legislature.