City officials have sponsored a bill that would restrict the 17.5 percent tax abatement awarded to owners of condominium and co-op units and abolish it altogether for people who aren’t primary users, NY1 reported. The tax abatement, which is about to expire, works to offset a tax law disparity that charges a higher rate for co-op and condo units than it does for single-family homes. Eva Talel, a Stroock attorney who specializes in co-ops and condos, told NY1 that the abatement is likely to be extended at least for the remainder of the year.
But the State Legisulature is determining how to proceed with the rule in the future. One proposal would extend the current laws through 2016, but the city-sponsored one would restrict the tax abatement to primary residences and would limit it to $100,000 in value.
While the bill would actually increase the pool of owners who qualify for the 25 percent tax abatement given to buildings with low tax evaluations, it would cost owners of higher-priced apartments, especially in Manhattan, thousands. NY1 noted that it also might make it more difficult for co-op and condo boards to collect extra money for improvements. [NY1]