Relates to classifying properties held in condominium and cooperative form for assessment purposes as class one-a properties

This section also adds a new section 1803-c directing the New York City Commission of finance to establish a new tax class one-a and to calculate shares for class one, class one-a, class two, class three and class four where the base year used in the calculation of the current base proportion shall be the 2016 assessment roll and the sum of class one-a and class two shall not exceed the prior year adjusted base proportion for such classes. The after 2018, assessment rolls prepared according to January 1, 2018, the adjusted base proportions for class one and class one-a shall not exceed each class' prior adjusted base proportion by more than five percent. And finally this section requires the city of New York to set a tax rate for class one-a in the same manner as all class shares are calculated pursuant to sections eighteen hundred three, eighteen hundred three-a and eighteen hundred three-b of this article and further requires that the assessment ration for class one-a shall be six percent.

Section 2 of the bill amends subdivision 1. paragraph (c) of subdivision 2 and subdivision 4 of section 307-a of the real property tax law to include the new class one-a.

Section 3 of the bill amends paragraph (1) of subdivision 1 of section 467-a of the real property tax lax is amended and a new paragraph (i) is added to state that "market value" shall be calculated based on comparable sales

Section 4 of the bill amends subdivision 2 of section 467-a of the real property tax law by adding seven new paragraphs relating to partial property tax abatements.

Section 4-a of the bill amends the real property tax law by adding a new section 467-a-1 creating an enhanced partial abatement for certain condominiums and cooperative residences such that in the fiscal year commencing in two thousand and seventeen eligible units in property whose average unit market value is less than six hundred and fifty thousand dollars shall receive and enhanced abatement equal to the excess above two percent of the difference between the prior year's property tax and the current year's property tax; in the fiscal year commencing in two thousand and eighteen eligible units in property whose average unit market value is less than six hundred and fifty thousand dollars shall receive and enhanced abatement equal to the excess above four percent of the difference between the prior year's property tax and the current year's property tax; and in in the fiscal year commencing in two thousand and nineteen and thereafter eligible units in property whose average unit market value is less than six hundred and fifty thousand dollars shall receive and enhanced abatement equal to the excess above six percent of the difference between the prior year's property tax and the current year's property tax. This section also states that the enhanced abatement shall not be eligible for units where the commissioner determines that renovation or construction within the unit or building has produced a substantial yearly increase in the unit's assessed value.

Section 5 through 20 amend various sections of the real property tax law and the administrative code of the city of New York to add tax class one-a to each of these sections. In addition, Section 11 creates new sections 1-a and 1-b. Section 1-a states that assessment rolls compute for class one-a shall include any outstanding phased-in increases accrued prior to the effective date of the chapter of the laws of two thousand fifteen which added this subdivision pursuant to subdivision three of this section. Section 1-b states that class one-a parcels shall be assessed in a method comparable to class one parcels.

Section 21 repeals section 581 of the real property tax law.

Section 22 amends portions of the "separate taxation" provisions under the "condominium act" set forth in subdivision 1 of section 339-y of the real property law by repealing sections (b), (d) and (f) and renumbering the remaining provisions.

Section 23 provides for this act to take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to assessment rolls prepared pursuant to a taxable status date occurring on or after such date; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.

Justification

This bill will create a new property tax class for co-ops and condos in order bring the property tax assessments in line with how taxes are assessed on class one properties which include one, two and three family homes. Currently coops and condos are classified as class two properties which include commercial residential properties. The manner in which they are currently assessed involves a comparison to "comparable" residential rental properties (excluding one, two or three family homes) which is inherently flawed. In fact, a more appropriate comparison for coops and condos is to residential one, two and three family homes or as discussed below certainly to other coops and condos and not residential rental properties. While coops and condos belong in a class one type of category they cannot be brought completely within the current class one because doing so would cause a significant increase in the current tax levies associated with class one properties. Furthermore, to bring coops and condos into the current class one category without carrying over their existing tax levies would result in a massive loss of revenue to the city of New York. Therefore the most reasonable and responsible change is to create a new class one-a category for coops and condos which will carry with it the current tax levies that are attached to such properties from class two to class one-a. The creation the of this new class will result in coops and condos being assessed based on comparable sales prices to other coops and condos which will be a much more equitable evaluation process. In addition, properties in the new class one-a will also be covered by the current property tax caps that exists for Class 1 properties which cap any single yearly property tax increase at 6% and 20% over a five year period. The bill will also require that the annual percentage changes in real property taxes, including school taxes, for class one-a properties will not exceed the annual percentage changes for class one properties.

Prior legislative history

2015-16: A4224-B (DenDekker)

Fiscal implications

To be determined.

Effective date

The act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to assessment rolls prepared pursuant to a taxable status date occurring on or after such date; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.