The Real Deal New York

Buyers using an LLC might get a tax break — if they can prove safety concerns

City officials are proposing that owners can submit a waiver
January 30, 2019 10:00AM

(Credit: Pixabay)

New Yorkers who buy property under an LLC for security reasons might be eligible for a tax break.

The city’s Department of Finance restricts condo and co-op buyers who use an LLC from getting a partial tax abatement. But a proposed amendment would let them apply for a waiver if they can prove they used a corporate name for security reasons, the Wall Street Journal reported.

The change was a suggestion from the law enforcement community and judges, city officials said. The department expects it would receive a limited number of waiver requests because the process requires documentation that they would be in danger if disclosed as the owner, the report said.

“The new rule is intended to benefit anyone who may have safety concerns having their address information made public, including those in law enforcement and victims of domestic violence,” said Finance Department spokeswoman Sonia Alleyne.

The tax abatement program can save owners between 17.5 and 28.1 percent a year on property taxes. To be eligible, the apartment must be the owner’s primary residence and they can’t be receiving an abatement or exemption through another program.

Celebrities often use LLCs for security concerns, but the entities have become one of the most dominant ways to purchase real estate in the city.

Mary Ann Rothman, executive director of the Council of New York Cooperatives and Condominiums, said she understood the security concerns but that apartments shouldn’t be owned by corporate entities.

“I’m not a big fan of corporate ownership,” she said, “and this of course would further encourage it.” [WSJ] — Meenal Vamburkar