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Comments on the NYC Department of Finance Proposed Rules Relating to the NYC Cooperative and Condominium Tax Abatement
January 30, 2019
The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. REBNY appreciates the opportunity to provide comments on the proposed rule amendment.
The NYC Department of Finance (DOF) is proposing to amend eligibility criteria for the partial tax abatement for residential real property held in the cooperative or condominium form of ownership to enable units held in Limited Liability Companies (LLCs) or in Limited Partnerships (LPs) to qualify for the abatement. Current rules prohibit units held in these forms from qualifying for the abatement. The proposed rules would allow units held by LLCs and LPs to apply for a waiver from DOF that would qualify them for the abatement on the basis of security concerns as long as other conditions are met.
REBNY fully supports the City’s amendment to its property abatement rules to allow these individuals the opportunity to file. These individuals are rightfully entitled to receive the abatement. The proposed rules outline requirements to qualify for the waiver that would ensure the unit is not used for commercial purposes and maintain the City’s primary residence requirement.
To ensure the accuracy of submitted information, REBNY encourages that the rulemaking clarify that managing agents should not be responsible for submitting forms on behalf of LLCs/LPs. Since 2013, when the primary residency provision was included as part of the eligibility qualifications, the practice of certifying and filing primary residency information for individual owners has primarily fallen to managing agents. However, managing agents are typically not aware of the reasons underlying ownership through an LLC or LP, if the unit in question is being utilized for commercial purposes, or, finally, if the unit is being used as a primary residence. Nor are they attuned to any particular changes in circumstance after the initial application is submitted. Therefore, REBNY recommends that the City require LLC or LP holder to file directly with the NYC Department of Finance rather than placing this requirement on managing agents.
Furthermore, to assist interested LLC or LP holders with compliance, once adopted, the City should consider clarifying the tax year when these amendments to the rules will be available and implemented by the city. Similarly, DOF should clearly stipulate timeframes for submitting this information. REBNY recommends these timeframes be aligned with other similar filing deadlines. Lastly, DOF should clarify whether any submitted applications will need to be renewed, the length of time the applications will remain effective, or whether a submitted application will be effective for the duration the LLC owns the unit.
Thank you for the opportunity to provide comments. REBNY looks forward to working with DOF to make further changes on the proposed changes.