ABATEMENT UPDATE – FEBRUARY 4, 2013

Representatives of the Department of Finance met with industry leaders today to discuss the way that the recently enacted changes to the abatement program will be implemented.

Because it is late in the  City’s 2013 fiscal year  which began in July 1, 2012 and ends on June 30, 2013, the changes will be deferred to July 1 , 2013 bills.

April  2013  bills will continue to follow the pattern that the City established in July, giving abatements to all units that qualified for them in the fiscal year 2012  (which ended on June 30, 2012).   The Department of Finance will send  a letter and chart in February , 2013 telling management how to distribute what has been received.

On property tax bills  for July 1, 2013 payment,  the Department of Finance will include all changes due for  City fiscal year 2013 (which ends on June 30, 2013)   as well as those for the first quarter of  City fiscal year 2014 which begins on July 1, 2013.  Buildings with average assessed values of $60,000 per unit or less will be credited with the full first year of increased abatement on that billing, plus the first quarter of  the City’s fiscal  year 2014  .  Units that are not the primary residence of their owners will have their abatement reduced by 50% of what was credited to it  for City fiscal year 2013 and will be credited with ¼ of the abatement on each of the bills for  City fiscal  year 2014, as their abatement is phased out.

In a strong effort to ascertain whether units are the primary residence of their owners, the Department of Finance is checking recipients of the STAR abatement and also reviewing Income Tax records to help with address verification.   Additionally,  the Department of Finance is  writing now to some 122,000 units that don’t appear to them to be primary residences, to give the individuals living there a chance to prove that their coop/condo is their primary residence.

Condo unit owners whose units are not their primary residences should anticipate increased bills in July , 2013 .

Cooperatives with many units that are not the primary residences of their owners — and most particularly buildings where the bank holding the mortgage takes monthly payments from the cooperative for property tax and water & sewer payments — should prepare themselves and their lenders for the likely increased payment that will be due in July.

Note that an individual can still receive abatements on up to two additional units in the same cooperative or condominium as their primary residence, but investment apartments in other buildings, pieds-a-terre, etc., will have their abatement reduced by 50% for the first year of the extender (all charged against the July 2013 bill) and by 75% for the second year which begins with that same July 2013 bill. After June 30, 2014, those apartments will not receive any abatement.

The Department of Finance website has a fact sheet on the abatement program, and a form for verifying primary residency will soon be available. Anyone registered for the STAR program has already confirmed primary residency and need not take any further action.

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