City proposes tax relief for co-op, condo owners.

New York Cityhs budget projections for the next few years include provisions for the cost of combining cooperative apartment buildings into the single family howeowner class for real estate tax purposes. Single family homeowners have capped assessments that cannot rise more than 20 percent over five years, while Class II, where these larger co-ops and condominiums are currently grouped, can undergo unlimited assessment rises.

Additionally, co-op owners pay an effective tax rate several times greater than a comparably assessed home.

A similar measure proposed by Sen. Roy Goodman some years ago was fought because at the time opponents were hopeful of a revamping of the entire system and flet the Senator's proposal would merely carve out more protected properties without providing overall relief to commercial and multi-family apartment house owners.

Since then, outcries from organized cooperative owners, a ch nge in Finance commissioners and a recent report by the Property Tax Reform Commission underlining the differences between the classes of homeownBrs have stirred the political waters further. Although no complete reform is in sight, officials believe this action will mollify at least one constituency.

While the politicians are claiming this will merely provide the difference between income producting properties and owner occupied properties, right now, they are not willing to being raising the taxes on single family owners who rent out either a portion of their own homes or even ten other homes.

"They are no different than an apartment house owner," insisted one miffed multi-family owner, who noted that they have to put up with all kinds of city and state regulations and capped rents while the single-family homeowners can charge as much as they want and pay much, much less in taxes.

Co-op boards will also have to be on guard for a repeal of Section 581 that provides they must be assessed as if they were a comparable rental property. Once they are no longer combined with the rental properties, they will not be alble to be compared to them.

According to budget projections, the ten-year phase in of the relief to co-ops and condominiums will cost the city $70 million in fiscal year 1996, $120 million in fiscal year 1997, and $175 million in 1998. "Such reform is warranted," said mayoral spokesperson Forest R. Taylor.

The proposal would have to be passed in Albany as well, added City Council Finance Director, Thomas McMahon.

Martin Karp, chairperson of the Action Committee for Reasonable Property Taxes said, "We welcome the major's statement and look forward to the specific arrangement. We view this as a first step to attaining tax equity in New York."