New Changes to the Application Process for NYC Cooperative and Condominium Property Tax Abatement

Practical Law Legal Update w-005-8328 (Approx. 4 pages)

New Changes to the Application Process for NYC Cooperative and Condominium Property Tax Abatement

by Practical Law Real Estate

New York City Cooperative and Condominium Tax Abatement

New York City Co-op-Condo Tax Abatement offers qualifying co-op and condo unit owners a property tax reduction ranging from 17.5% to 28.1%. The amount of the abatement is based on the assessed value of the residential units in the co-op or condo, as follows:

Average Assessed Value	Benefit Amount Per Year
$50,000 or less	28.1%
$50,001 - $55,000	25.2%
$55,001 - $60,000	22.5%
$60,001 and above	17.5%

To qualify for the abatement the co-op or condo unit must be the owner's primary residence. The unit must have been purchased on or before January fifth to qualify for the abatement for the upcoming tax year. Units purchased after January fifth are eligible for abatement in the following tax year.

There are additional limitations on abatement eligibility, including that:

The unit cannot be owned by a business entity (such as a limited liability company (LLC)) or held by a sponsor or their successors in interest.
Co-op and condo owners cannot own more than three residential units in any one development.
A unit owned by a trust is only eligible if the unit is the primary residence of the beneficiary of the trust, the trustee, or a life estate holder.
Co-op and condo owners cannot be receiving any of the following exemptions or abatements:
- J-51 exemption (a property tax exemption and abatement for renovating residential apartment buildings); or
- 420c, 421a, 421b, or 421g (tax incentive programs designed to reduce or eliminate a property owner's municipal taxes) .
The property must be classified as Class 2 property (residential property with more than three units including co-ops and condos).
The property cannot be:
- part of the Urban Development Action Area Program (UDAAP);
- a Housing Development Fund Corporation (HDFC);
- a Mitchell-Lama Building or limited dividend housing company; or
- in the Division of Alternative Management Programs (DAMP).

Changes to Abatement Filings

Applications for the abatement must be submitted by the board of directors or managing agent on behalf of an entire development. First-time applicants must complete the 2017/2018 Cooperative and Condominium Property Tax Abatement Application by March 31, 2017. In future years, this filing is due by February 15th. This form is available here.

Managing agents are also legally required to renew the abatement for their properties every year. In December of each year, the Department of Finance mails a tax benefit report to boards and managing agents currently participating in the program outlining each unit's tax under the abatement program. If there are changes or updates to any units on the report, managing agents must submit all changes, then sign and submit the form online. If there are no changes to the report, managing agents can renew the abatement for all eligible unit owners by checking the box on the online form stating that there are no changes.

This year, for units already receiving the abatement, two filings are required:

The 2017/2018 Tax Benefit Change Form, which must be filed to continue receiving an existing abatement or to add new eligible owners to an existing abatement. This year, this form is due by March 31, 2017. In future years this form is due by February 15th.
The 2016/2017 Tax Benefit Change Form, which must be filed by sponsors or managing agents. This must be filed by February 15, 2017.

Both of these forms are available here. For assistance in filing these forms, a user guide is available here.

New Changes to the Application Process for NYC Cooperative and Condominium Property Tax Abatement | Practical Law