In June 1996 the New York State legislature addressed the long-acknowledged inequity in real estate taxation between co-ops
and condos and single-family homes when it passed a bill authorizing tax abatements for eligible New York City owners of three or fewer co-op and condo apartments. Signed by Governor Pataki in July 1996, with the support of Mayor Giuliani and the City Council, this three-year abatement was to become permanent with the development of a long-term plan by the City Council and the Department of Finance. At present, the final plan is still being formulated, but many co-op and condo owners have taken advantage of the abatement to save a considerable amount on their real estate taxes.
In implementing the abatement, which provides tax relief ranging from two percent to 25 percent, depending on the value of the apartment, the Department of Finance has been responsible for disseminating information and administering the program. Application forms were mailed to all co-ops and condos in New York City with instructions for filing. The paperwork must be completed by a co-op or condo board officer or managing agent, not by individual residents. The abatement schedule is aligned with the City's real estate tax year, which runs from July 1 to June 30. The deadline for filing for fiscal 1996/97 was in October, 1996. The deadline for filing for fiscal 1997/98 was in April, 1997. Because of the learning curve involved in the first filing, the Department of Finance extended the 1996/97 deadline to April 1997. As a result, in mid-1997, after establishment of the 1997/98 New York City tax rates, the Department of Finance notified some 269,000 eligible co-op and condo apartment owners that they would be receiving abatements for both the fiscal l996/97 and 1997/98 tax years.
In September the Department of Finance distributed these abatements to the buildings as a credit on their tax bills. The procedure from that point varied from building to building depending upon what the board had voted to do. In some cases the managing agent issued a check to each eligible shareholder or unit owner. In other buildings eligible residents received a credit on their monthly maintenance bill or a series of credits spread out over six months.