What Is the Cooperative and Condominium Property Tax Abatement in NYC?

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What is the co-op condo tax abatement in New York City and how can you make sure that you actually are receiving the abatement? We'll demystify this topic in the following video, my name is Chris at Hauseit. Hauseit is the largest For Sale by Owner and buyer commission rebate company in New York City established 2014. You can check us out at https://www.hauseit.com

The coop condo tax abatement can save apartment owners 17.5% to 28.1% off of their annual property tax bills depending on their average assessed value. The calculation is based on several brackets in a progressive sliding scale for properties that have an average assessed value of 50,000 or less they qualify for the maximum tax savings of 28.1%.

For properties with an average assessed value of sixty thousand and one dollar and more they qualify for the lowest tax bracket of 17.5% in savings. Keep in mind that that assessed values typically have nothing to do with true market value. For example, let's say a one-bedroom condo in lower Manhattan with a market value of say $2,000,000 might have an assessed value of only $150,000 or so. Again, this has nothing to do with actual market value it's just a figure that local officials used for taxation purposes.

So how can property owners check whether they've been eligible or already received the coop condo tax abatement? Well, for condo owners they can shut their property taxes directly on the New York City Department of Finance website and take a look at their latest quarterly tax bill. At the end of the quarterly tax bill, they'll see an annual tax figure and before that they'll see any reductions due to abatement or exemptions.

If you are receiving the coop condo tax abatement, you will see it outlined as a line item which reduces your tax bill. Co-op apartment owners will want to ask their managing agent whether they've qualified and receive the coop condo tax abatement. You can also check your maintenance bill if you are a co-op apartment owner and see if you have automatically been credited money from your next monthly maintenance bill due to the abatement. Oftentimes, co-op buildings will actually just retain the money that comes from the tax abatement directly as revenue and issue a special assessment to shareholders for the exact amount of the tax rebate so that no money actually goes to the shareholder.

This is actually quite common and the reason often given for this is to reduce the amount of maintenance or monthly maintenance optically so that it's easier for any potential sellers in the building. So, as a condo or co-op owner, do you need to apply for the tax abatement yourself? Well, no actually the managing agent of your condo or co-op building is responsible for filing this on your behalf and for checking ideally each year or whether a condo or co-op apartment owner still utilizes the apartment as his or her primary residence which brings us to our next section. What are the requirements to qualify for the condo co-op tax abatement?

The first one as we've discussed is the property must be the primary residence of the apartment owner. This means no investors or second home buyers. The home cannot be owned by an LLC or any type of business. You cannot own more than three residential units in a building and if you own three or under then at least one of the units must be your primary residence to qualify.
Units owned by sponsors or their successors and interests are not eligible. In a similar vein, if the property is held by a trust, the property is only eligible for the abatement the beneficiary has his or her primary residence at the property.

We hope you found this video helpful, if you have any questions about buying and selling property in New York City and how you can save money on closing costs or broker commissions please check us out https://www.hauseit.com. We'll see you on the next one!

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Seller Closing Cost Calculator: https://www.hauseit.com/closing-cost-estimator-for-seller-nyc/
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Hauseit LLC, Licensed Real Estate Broker
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