New law to cap taxes for 2-10 co-ops/condos.
The actual assessments on some 1,500 buildings with approximately 10,000 individual units, will not increase more than 8 percent in any one year nor rise by more than 20 percent in any five-year period. The law takes effect for the tentative tax roll being prepared for Jan. 1993 and the Department of Finance expects to recalculate actual assessments forward from 1981 to begin the five-year cycles. Those buildings that became co-ops or condos in a later year would begin calculations in the year of their Certificate of Occupancy, said Lawrence H. McGaughey, secretary of The 2-10 Unit Owners Association for Fair Co-op and Condo Taxes.
The group had campaigned strongly for the change and McGaughy is a coop attorney who found his clients were being treated unfairly.
"This is a very small, well deserved step in much needed overall reform," he said.
Mary Ann Rothman, executive director of the Council of New York Cooperatives, said the legislation continues an unfair policy, but, since this exception was carved out for rentals, it should include the co-ops. "We have a system that is unfair but it was grossly unfair, to co-ops that were the same in every way as these small rental properties," she noted. "This law gives to the people in co-ops and condos what their rental brethren had but doesn't create fairness overall and our crusade continues."
Rothman said she had notified several hundred co-op and condo members that come under the new rule while at the same time noting that there were several dozen buildings having 11 units or slightly more that would be unaffected. Most of the buildings affected are small loft buildings and brownstones in Brooklyn and Manhattan.
Noting that the legislators are beginning to change bits and pieces of the real property tax law, S7000A, she said it would be better to have new comprehensive legislation that examines the whole tax policy, such as that developed by New York City's Commissioner of Finance Carol O'Cleireacain. That proposal has been under wraps in the Mayor's office while compromises are reached regarding the effect on single-family homeowners who enjoy even more favorable assessment rise protections.
Jon Lukomnik, the new assistant commissioner of the Department of Finance, said the City Council leadership and the New York State legislature recognize there is a problem. "We have to figure out what the process is to lead to a compromise," he said.
He said the city has been aware for a long time that there was inequity in the system so the tactic in the past was to discourage the granting of relief to subsets.
"In previous years we've filed memos in opposition to this change in Class II," he said. "This year we said, |they've suffered long enough' and removed the opposition," allowing the 2-10 unit owners to obtain this relief.
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|Title Annotation:||law signed by New York State Governor Mario Cuomo; condominiums|
|Publication:||Real Estate Weekly|
|Date:||Aug 19, 1992|
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