The City recently amended the New York City Administrative Code with respect to the filing of Real Property Income and Expense (RPIE) statements with the Department of Finance (DOF). In a key change, the filing deadline was pushed up to June I from September I, beginning with next year’s RPIE filing. The deadline was moved up to allow the DOF more time to do a better job of valuing properties.
Because of the earlier filing date, the fiscal year filing option was also adjusted. Owners have the option to complete the RPIE statements based on information from the previous calendar year or the previous fiscal year. The fiscal year option will now conclude on May I of the year in which the RPIE is filed (moved up from August I).
The law amending the RPIE deadline (Local Law 52 of 2013) also clarifies that owners who have not held a property for an entire year (fiscal or calendar, depending in the owner’s filing option) are not required to file an RPIE statement for that property in that filing year. Owners who fall under this exception must file a claim of exemption with the DOF. Failure to file the claim of exemption will result in a monetary penalty.
Despite creating a more hectic schedule for owners, the law includes additional provisions aimed at creating greater transparency regarding the way RPIE statements are used by the DOF in determining a property’s market value. Currently, an owner submits the RPIE statement and a few months later is provided with a notice of property value, without any information from the DOF regarding how and to what extent the various components of the RPIE statement were used or adjusted by the DOF in valuing the property. But under the new law, the DOF must post the following information on its web site:
- A distribution by relevant geographies and building types of the factors used in determining market values, such as incomes, expenses, and rates of capitalization. The distribution should provide, at a minimum, the first, second and third quartiles of such factors;
- Specific formulas, data sources, and values used to determine the rates of capitalization for real property valuation;
- Average values and changes of incomes and expenses, as reflected on the statements required to be filed;
- A statistical summary of the changes in the total market value and assessed value for each property tax class and property category from the assessment roll of the previous year;
- A statistical summary of equalization and non-equalization changes from the assessment roll of the previous year; and
- The method of valuation used for each property listed on the estimate of the assessed valuation of real property subject to taxation for the ensuing fiscal year, and the information used to determine such valuation.
- Another positive part of the new law provides owners with an opportunity to cure the failure to file an RPIE statement or claim of exemption prior to the imposition of penalties for such failure to file. Any penalties are considered a lien against the property.
- Also noteworthy are some items that were proposed as part of the legislation but were omitted from the final law. The proposed legislation required RPIE statements to be certified by a CPA.an additional step that would have increased costs for owners. Further, when the legislation was proposed in 2012, the changes were intended to apply to the 2012 RPIE being filed in 2013. CHIPEs lobbying efforts were able to remove the certification requirement and ensure that the bill was not rushed through the legislative process. CHIPE’s efforts were also key in solidifying the requirement to provide owners an opportunity to cure, a provision that was at the commissioner’s option in the originally proposed legislation.