Requires market-based assessments on real property owned or leased by a cooperative corporation or on a condominium basis

Summary of provisions

Section 1 adds paragraph (d) to section 581 of the real property tax law, allowing municipal corporations to remove the limitations in that section on assessments on condominiums and cooperatives converted or constructed on and after January 1, 2016 in any municipal corporation other than New York City and Nassau County.

Section 2 adds paragraph (g) to section 339-y of the real property law, allowing municipal corporations to remove the limitations in that section on assessments on condominiums and cooperatives converted or constructed on and after January 1, 2016 in any municipal corporation, other than New York City and Nassau County.

Existing law

Section 399-y of the Real Property Law, limits the assessments which can be placed on condominium units other than those classified in the homestead class in municipalities applying a dual tax rate. Section 581 of the RPTL limits the assessments which can be placed on condominium units, other than those classified in the homestead class, in municipalities applying dual tax rates, residential cooperatives and municipal dwellings, Chapter 293 of the laws of 1997 enables municipal corporations, other than New York City and Nassau County, to provide that "converted condominiums" (i.e., residential condominium units which have been converted to condominium ownership from conventional ownership) shall be assessed without regard to the assessment restrictions otherwise applicable to condominiums (RPTL, 581(1); Real Property Law, § 339-y(1)(f)). This is also allows local governments to decline to grant these benefits to converted condominiums, thereby removing the incentive to convert existing housing condominium ownership to reduce taxes. Preexisting condominiums are not affected by the changes made by chapter 293, which is similar to this proposal.

Justification

As currently written, the real property tax law and real property law does not allow the sum of the assessments of individual cooperative or condominium units to exceed the value of the entire complex if it was valued as a single entity. The restriction tends to reduce condominium and cooperative assessments by preventing the use of sales of units in the assessment process. The Office of Real Property Services, assessors and other local officials generally consider the restrictions an unreasonable state mandate which unfairly limits the revenue-raising abilities of local governments. Assessors

and appraisers also cite the difficulties they encounter when they are forced to ignore market information--usually the best indicator of value-in developing estimates of taxable value. This bill would allow municipal corporations to value newly constructed and converted cooperative and condominium units as they would other real property to alleviate any negative impacts placed on the locality by the current statute.

Legislative history

2013: S. 1001 Referred to Local Government; A. 6268 Referred to real Property Taxation 2011-12 S. 133-A Referred to Local Government; A. 5339-A Referred to Real Property Taxation 2009-10: S. 255 Referred to Local Government; A. 5124 Held for consideration in Ways & Means 2008: S. 7727 3rd Reading: A. 10730 Ways & Means

Fiscal implications

To be determined

Effective date

This act shall take effect immediately and shall apply to assessment rolls prepared on the basis of taxable status dates occurring on or after January 1, 2016.