The Abatement Debate New York City Co-ops Struggle for Tax Parity

To address the problem of steeply escalating taxes on co-ops and condos, the Council of New York Cooperatives and Condominiums (CNYC) created the Action Committee for Reasonable Real Estate Taxes in February of 1990. During their study and investigation, the group discovered that there was a gross disparity between the taxes paid by co-op and condo owners and those assessed to private homeowners; according to the committee's findings, co-op and condo apartments in buildings containing more than three units were paying three to five times more in property taxes than single-family homes of comparable value. Co-ops and condos were being taxed as Class Two income-producing properties, rather than as the single-family homes that most of them were, simply because they happened to be apartments in large buildings.

"State law requires us to assess co-ops and condos as if they are income-producing properties," says New York City Finance Commissioner Martha E. Stark, "and co-ops as if they are rent-regulated apartments. If parity is the goal, then co-ops and condos should be valued like other homes - based on sales, not income."

Taking Action

Martin Karp is the current chairman of the CNYC's Action Committee and is working on proposals to equalize the city's current property tax structure. Under his leadership over the last decade, the committee began a successful lobbying campaign to level the playing field and equalize co-op and condo real property taxes.

"Homeowners in New York City co-ops and condominiums have been eligible for an abatement on their property taxes since 1996," says Karp. "In reviews by city and state government representatives on tax policy, it has been agreed that there should be no difference in tax treatment between owner-occupied one-, two-, or three-family homes in Class 1 and owner-occupied co-op and condo apartments in Class 2 [properties]."

Karp and his committee have had some help along the way. In his 1996 Financial Plan - and after a lot of political discussion - former New York City Mayor Rudy Giuliani offered a property tax reduction for co-op and condo owners. According to Karp, the abatements were 25 percent for apartments with average assessed values of $150,000 or less, and 17.5 percent for apartments with assessed values greater than that figure. This abatement program started to address the disparity in taxes - but not everybody who owned co-op or condo apartments in the city qualified.

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