The Coop / Condo Abatement: New Rules That Any Real Estate Expert Needs to Know
NYC real estate taxes are an important component of value, and recent developments in this area require close attention.
This abatement gives eligible coop and condominium owners a reduction in their real estate taxes. Here are the changes that were recently enacted.
Primary residence: The apartment must be the owner’s primary residence to be eligible for the abatement, and parking spaces and storage units are no longer eligible. This is an important change and is effective July 1, 2014. Non-residents who received the abatement in tax year 2011/12, will have the abatement phased out in fiscal 2012/13 and 2013/14. Tax year 2014/15 it will be completely phased out for non-residents.
Multiple unit ownership: Ownership of 4 or more units in the same building disqualifies the owner from any abatement, regardless of whether one of them is a primary residence. If one owner owns 3 or fewer units, and one is the primary residence, the abatement will apply to all of the units. But if 3 or fewer units are owned and none are a primary residence, then none will get the abatement.
Other exemption / abatement programs: This change in law will not affect other real estate tax relief programs, but recipients of certain relief programs are ineligible for the coop/condo abatement, without regarding to primary residence status. These programs are: (a) J51, (b) 420c, and 421 a, b and g, (c) HDFC, (d) DAMP, (e) Mitchell-Lama, and (e) clergy. Personal exemptions, however, will have no impact on the receipt of the coop/condo abatement. Examples of these programs are: (a) STAR, (b) disabled homeowner, (c) senior citizen, and (d) veterans.
Trusts: In determining principal residence for a unit owned by a trust, NYC Finance requires that the unit is the principal residence of the beneficiary of the trust, the trustee, or in the case of a life estate, the life estate holder.