Leaders in Albany have promised to finally enact the extension of a tax abatement for co-ops and condos, but some won’t celebrate until it passes an official vote.
Gov. Cuomo and Assembly Speaker Sheldon Silver (D-Manhattan) promised to extend the abatement, which was left on the legislative floor in Albany this summer and subsequently put on the back burner after Hurricane Sandy. The bill would be retroactively enacted to its original June 30, 2012 expiration date. The assured passage did not come with a specific timeline.
“The Assembly, Senate and Governor Cuomo reached an agreement, at the end of Session last June, on tax relief legislation they have all stated will be taken up when legislators return to Albany,” Cuomo’s office said in a statement. “When the legislation is signed into law, the tax abatement will be retroactive and condo and co-op owners will be held harmless.”
The city has been so certain of the abatement’s continuation the Deptartment of Finance sent tax bills as if passed in June.
The tax reprieve was first authored to right a perceived inequity in the tax code. Co-ops and condos are grouped into the same tax bracket as commercial properties, making them subject to significantly higher rates than standard 1- to 3-family homes. The snafu was rectified by the temporary abatement, which has been renewed every year for nearly two decades. In some cases, it spares co-ops and condos $1,200 in tax increases per unit every month.
A version of the abatement authored by Assemblyman Ed Braunstein (Bayside) was thrown into an omnibus bill in June, which did not pass ahead of Albany’s summer recess.
“Many co-op owners in Northeast Queens have contacted my office to express their concern regarding the extension of the co-op tax abatement,” Braunstein said in a statement. “They are nervous that they will see a substantial increase in their maintenance costs if the abatement is allowed to expire. Therefore, it is reassuring to receive a commitment from the governor and the speaker to pass an extension retroactively.”
The bill’s languishing had some co-op and condo owners distraught, holding gatherings and press conferences demanding it be passed in a special session before the holidays. Those same voices are not taking too much solace in Cuomo’s assurances.
“I am cautiously optimistic that we may actually see some positive action on this,” said Bob Friedrich, president of the Glen Oaks Village co-op and co-president of the Presidents Co-op and Condo Council. “I have always maintained that talk is cheap and actions speak louder than words.”
The abatement’s temporary nature has many calling for a permanent fix. At heart lies the inequity in the classification, which leads the DOF to equate the value of co-ops and condos to revenue-generating properties.
“It puts us in with commercial properties, income-producing properties, which we’re not,” said Warren Schreiber, co-president of the Presidents Co-op/Condo Council and president of the Bay Terrace Community Alliance, who was among those demanding a special session. “You’d be hard-pressed to find that many rentals.”
Changing the classification would require a bit of legislative muscle in Albany, which simply doesn’t exist, according to state Sen. Tony Avella (D-Bayside). Tax matters that affect city coffers are usually guided by the Mayor’s Office, he said. A reclassification would cost the city millions in revenue, which Mayor Bloomberg has resisted.
“The annual abatement is just an annual Band-Aid,” he said. “The Mayor is the biggest hold up. He’s claiming the city doesn’t have enough money to do this. Even if it does cost the city money, co-op and condo owners have been overpaying for years. It’s time to give them a break.”
Avella has slim hopes a reclassification will pass anytime soon.
“Too many people are afraid of the mayor,” he said.