Relates to certain tax credits and exemptions in a city having a population of one million or more

Summary

This bill amends section 467-a of the Real Property Tax Law to extend and modify a real property tax abatement program for condominiums and cooperatives in the City of New York.

Section one of the bill enables the Commissioner of Finance to designate the owner of a unit as the applicant for the program.

Section two of the bill limits the abatement to a maximum of three units in a single building, one of which must be the primary residence of the applicant, for fiscal years on or after 2013.

Sections three, four, and five of the bill modifies and extends the program for four additional years (for fiscal years beginning in 2012, 2013, 2014 and 2015). This section extends current law for fiscal year 2012 and provides an enhanced benefit (an abatement between 20 and 25%) to the owners of eligible units with an assessed below $60,000 and main- tains the current 17.5% abatement for those eligible units with an AV of $60,000 or more for fiscal years 2013-2015. This section also phases out the benefit for owners of condominiums and cooperatives that are no longer eligible for the abatement.

Section six, seven, eight, nine and ten of the bill relate to applica- tions and the approval process for the program.

Section eleven amends section 11-1706 of the Administrative Code of the City of New York to enable New York City to adopt legislation creating a credit on the City's personal income tax, for resident shareholders of S-Corporations that pay the New York City general corporation tax (GCT). The credit would be on a sliding scale and ranges from 100 percent of GCT liability for taxpayers with New York City taxable income of $42,000 or less and gradually goes down to zero percent of liability for taxpay- ers with taxable income of $250,000 or more.

Section twelve of the bill amends section 489 of the Real property Tax law known as the City of New York as the J-51 program. It would extend

retroactively, from June 1, 2011 until June 1, 2014, the deadline for local legislative action providing tax incentives for the rehabilitation and upgrading of multiple dwellings. Currently the law also provides that in order to be eligible to receive J-51 benefits, a development must be completed prior to December 31, 2012. This amendment would authorize the local legislative body to extend that date until December 31, 2014.

Justification

Since 1996 the City of New York has offered, with State authorization, a partial property tax abatement program for coop and condo owners. The program was established to address inequities in the real property tax system in New York City that creates a higher tax burden on co-ops and condominiums than on comparably valued one, two and three-family homes.

This bill extends the program for four additional years, provides addi- tional benefit by enriching the abatement for lower and moderate valued properties, and eliminates the benefit for non-primary residents. Primary residents may own two additional units in the same building and continue to receive the benefit.

The bill also lowers the tax burden on limited liability S-Corporations in order to encourage job creation in New York City. Resident sharehold- ers of S-Corporations would be able to take a nonrefundable credit against their New York City personal income tax liability equal to a portion of their share of the business's corporate tax liability. The credit is based on a sliding scale and ranges from 100 percent of GCT liability for taxpayers with New York City taxable income of $42,000 or less and gradually goes down to zero percent of liability for taxpayers with taxable income of $250,000 or more. There are 123,000 S-Corpora- tions in New York City. Most S-Corporations are small businesses.

In order to preserve affordable housing in the City of New York this bill would extend the J-51 program that serves as an incentive to owners to maintain and upgrade existing multiple dwellings. J-51 benefits apply to a variety of improvements including, but not limited to, the instal- lation or replacement of heating systems, plumbing, wiring, elevators, windows and a range of other major capital improvements. The program also grants tax benefits to owners of non-residential buildings who convert their buildings to residential use. The program issues 14 or 34 year exemptions from taxes on any increase in assessed valuation result- ing from those alterations certified by the City's Department of Housing Preservation and Development ("HPD") and an abatement of property taxes of construction costs as certified by HPD. The J-51 program has been primarily responsible for the rehabilitation and upgrading of New York City's housing stock since 1955. It has also been essential in ensuring that affordable housing will continue to be available to the residents of New York City.

Legislative history

New Bill.

Fiscal implications

None to the State.

Effective date

Immediately, and retroactively to the date of the expiration of the authority for the city to enact J-51 legislation, June 1, 2011.