NY Governor Signs Coop / Condo Bill into Law

By
Real Estate Agent with The Corcoran Group

Governor Cuomo signed into law (Chapter 4 of the Laws of 2013) the Omnibus Housing bill that renews the coop/condo abatement and J-51 programs and amends the certain provisions of the 421a program.


REBNY the real estate board of new York worked

REBNY

vigorously over the last six months for the early passage of this legislation which was agreed to at the end of the 2012 legislative session.


A brief explanation of the bill’s provisions is below.


Coop/Condo Abatement


The coop/condo abatement would be extended for three years.  However, to be eligible for the abatement, the unit must be the primary residence of the unit owner.  A unit owner may still receive an abatement for up to three units, provided they are in the same building and one of the units is the owner’s primary residence.  In addition, the thresholds for an abatement were modified as described below

 

Average AV:

≤$50,000

$50,000-$55,000

$55,000-$60,000

>$60,000

FY2012

25%

22.5%

20%

17.5%

FY2013

26.5%

23.8%

21.2%

17.5%

FY2014

28.1%

25.2%

22.5%

17.5%


For non-primary residence coops/condos where the unit received an abatement in FY2011 the abatement will phase out according to the schedule below.

 

Average AV:

≤$15,000

>$15,000

FY2012

12.5%

8.75%

FY2013

6.25%

4.375%

FY2014

0%

0%

 

J-51

 

The J-51 program, which provides a tax benefit for the renovation of existing housing, would be extended three years.  However, the amendments would eliminate benefits for the conversion of commercial space to residential use and limit the eligibility for condominium and cooperative buildings with units whose average assessed value per unit is >$30,000.  However, projects that receive “substantial government assistance,” which is defined to include city, state, or federal loans or grants, are not subject to this cap.  Likewise, conversion projects receiving substantial government assistance would be eligible for J-51 benefits.


421a


The amendments to 421a would encourage new residential development in high density 15 FAR districts in Midtown and Downtown Manhattan. In the modification to the program in 2007, the renewal of this separate provision was accidentally omitted.  This amendment was intended to restore the benefits that have been part of the program since 1993.  In addition the bill restores flexibility in the completion of construction provisions that are crucial to the resumption of stalled housing projects.


source: REBNY


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Rainmaker
1,434,195
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

Whew, too complicated for me sir, but glad you know what it's all about!

Feb 06, 2013 07:24 AM #1
Rainmaker
509,954
Mitchell J Hall
The Corcoran Group - Manhattan, NY
Lic Associate RE Broker - Manhattan, NYC

For Manhattan coop and condo owners it basically means they get a 17.5% real estate tax abatement for three more years because their value is above $60,000.

The reason behind the abatement is coop and condo owners pay higher real estate taxes than most single family homes in other parts of city. NYC has a complicated real estate tax formula based partially on the income the building would generate if the property was a rental building and the year built. So a prewar building built in 1920 on Park Avenue or 5th Avenue will pay lower taxes than a new building on the Upper West Side.

The good news is that NYC real estate taxes are far lower than near by NY, NJ and CT suburban communities because NYC real estate taxes do not pay for public schools like most municipalities.

The bill phases out the abatement for non resident owners aka investors or piede-a-terre owners.

Feb 06, 2013 07:47 AM #2
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Rainmaker
509,954

Mitchell J Hall

Lic Associate RE Broker - Manhattan, NYC
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