The city sent thousands of co-op and condo owners letters that wrongly stated that they were no longer eligible for a popular tax break, Crain’s reported. The New York City Department of Finance issued the notices last week, stating that an amended legislative tax abatement bill meant that these homeowners could no longer avail of the tax break at properties that were not their primary residences. “Our records show that this unit is not your primary residence, so your abatement will be phased out,” the letter stated.
Many homeowners, however, received the letters at their primary residences, which still qualify for the tax breaks, Warren Schreiber, co-president of the Co-Op and Condo Council in northeast Queens, told Crain’s, and added that 45 people in his co-op building had received the letters. Thirty-five of these people counted the property as their primary residence, he said.
“Some people have been in their homes 20, 30 or 40 years and are getting these letters,” Schreiber said. “I think what happened is that the Department of Finance’s records are out of date, but it’s causing a lot of confusion and chaos.”
A spokesman for the department said that the agency had used available data to gauge how many of the city’s 360,000 condos and co-ops were still eligible for the abatement. Where there was a lack of information, the spokesman added, the agency sent out letters of ineligibility.
Real estate insiders see tax breaks as essential to the market’s growth, as The Real Deal previously reported.
The condo and co-op bill’s revised tax policy was initially set out in June 2012, but only passed in January 2013. The new program increases benefits to middle-class owners, raising abatements from 17.5 percent to 26.5 percent in 2014 on properties valued below $50,000. The new bill prohibits abatements for speculators and investors who wish to claim them on pied-à-terre or investment properties. [Crain’s] –Hiten Samtani