Page 9 - New York Cooperator February 2020
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COOPERATOR.COM  THE COOPERATOR —  FEBRUARY 2020     9  Cesarano & Khan, PC  Certified Public Accountants  PROVIDING PROFESSIONAL SERVICES TO   THE COOPERATIVE AND CONDOMINIUM COMMUNITY  Reporting on Financial Statements •  Tax Services  Budgeting & Consulting • Election Tabulation Services  For additional information, contact  Carl M. Cesarano, CPA  199 JERICHO TURNPIKE, SUITE 400 • FLORAL PARK, NY 11001  (516) 437-8200  and   718-478-7400 • info@ck-cpas.com  cesarano &khan1_8 use this_:cesarano &khan 4  7/22/15  4:59 PM  Page 1  of the market, since buyers at that level   were less concerned about and dependent   on the tax benefits of ownership than mid-  dle-class buyers. According to a fair num-  ber  of market  pundits,  the very  wealthy   had different needs and considerations in   making their purchasing decisions; it now   appears that those market-watchers were   dead wrong.  Market experts surveyed by   The Co-  operator   indicate that contrary to those   earlier opinions, the savings from SALT   deductions on their units were in fact   important to luxury purchasers. With   SALT deductions now capped at $10,000   per unit, tax savings are capped as well.   Consider a tax bill of $1,500 per month,   equal to $18,000 per year; at the low end   of the spectrum for a luxury condomini-  um in Manhattan, the owner loses $8,000   per year in deductible expenses, equat-  ing to at least $3,600 per year. And keep   in mind, this calculation doesn’t take into   account whatever state and local income   LUXURY...  continued from page 1  60 Cutter Mill Road, Suite 303   Great Neck, NY 11021  Phone: (516) 466-3100   www.MajesticPropertyMGT.com  Specializing in:  • Quality Management Services  •  In-House Expertise in Cooperative/Condo:     ›  Budgeting/Financial Planning, Taxes,   Insurance  • Cooperative/Condo Sales  •  “24/7” Emergency Answering Service  •  General Contracting and Supervision of   Capital Improvement Projects  M  ajestic  PROPERTY MANAGEMENT CORP.  A Leader in Property   Management for 30 Years  of achieving that is a commitment to listen   and take others’ concerns seriously.   Davidson shares a similar approach.   “Identify solutions to each conflict,” he   says.  “Create rules for decision making.   Then survey the board members. How do   they rank the suggested solutions, ranging   from ‘strongly agree’ to ‘strongly disagree’?    Produce a summary of the results.” David-  son points out that in his experience, there   is often nearly 100% agreement among   board members, because solutions are usu-  ally pretty simple. “If there are disagree-  ments,” he says, “hold a discussion.  And   importantly, acknowledge areas of conflict   to work toward a common solution. Once   you have rules of the road, you can manage   conflict.”  Freedland  concurs,  summing  up  with   the assertion that “Dissention shouldn’t   permeate every issue. Work it out and get   on with it.”    n  A J Sidransky is a staff writer/reporter for   The Cooperator, and a published novelist.   tax deductions the owner has lost as well   as a result of this change. The resulting tax   savings has fallen in most cases by tens of   thousands of dollars.  One fascinating side effect of this   change is that increasing numbers of own-  ers in New York are choosing to sell their   units and move to lower-tax states like   Florida to take greater advantage of the   new tax provisions. Terence Tener, found-  ing partner of Manhattan-based KTR Real   Estate Advisors, suggests that we are expe-  riencing the beginning of a flight of capital   from New York to other markets by those   high-income individuals able to make the   move.    Additionally, the new tax law limits   mortgage interest deductions on loans up   to $750,000; the limit was previously set   at $1,000,000. The conventional wisdom   among the same pundits who believed   SALT deductions weren’t a consideration   for luxury buyers also held that those same   buyers purchased their units with cash or   nearly all cash, and therefore wouldn’t be   deterred by limits on mortgage interest   deductibility. Apparently, this opinion was   unsubstantiated as well. Luxury buyers do   encumber real estate purchases with debt,   and they have reacted to the loss of some   portion of this tax benefit by reconsider-  ing purchases that previously would have   provided them with substantially more tax   savings.  New Rent Laws and the Mansion Tax  While a revision of New York State’s   rent regulations was long overdue, the in-  tention of the law wasn’t to affect the co-  op  and condo  markets—yet  it has  done   just that. While a legislative fix may be   on its way at some point in the future,   at present, new limits imposed on things   like security deposits, late fees, and credit   and background checks have dampened   purchasers’ enthusiasm for luxury condo   units. In simple terms, investors at this   level don’t want to contend with addition-  al rules and regulations for the leasing of a   single condominium unit. They don’t want   to be considered landlords. Until recently,   “About 25% of the high-end condo market   units were purchased by investors,” says   continued on page 10 


































































































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