Manhattan residents — especially those living in tony neighborhoods off Central Park — benefit disproportionately from an expired state tax break for condo and co-op apartment owners, Crain’s reported. The $444 million tax break, which affects approximately 364,000 condominiums and co-op owners, was enacted in 1997 to share tax burdens between apartment dwellers and homeowners. An analysis by the Independent Budget Office reveals that roughly 60% of the tax break flows to Manhattan residents.
Though the tax break expired in June, the city has promised to continue to issue tax bills that reflect it, in preparation for a potential reauthorization of the break by the State Legislature in early 2013. If the Legislature doesn’t authorize the break, condo and co-op owners could face higher tax bills. Gov. Andrew Cuomo and other state leaders have expressed support for renewal. But the IBO argues that a simple renewal of the break may not be the best option. Instead, it advocates limiting the tax break to owner occupants, which would halve the city’s cost to maintain the program.
As The Real Deal reported yesterday, the 11th hour compromise struck on the so-called fiscal cliff will benefit the housing market by leaving two federal tax provisions — the mortgage-interest deductions and the extended tax relief on mortgage debt forgiveness — unscathed. [Crain’s] –Hiten Samtani