NYC Cooperative And Condominium Tax Abatement

By PropertyClub Team
May 17th 2024
Owning a home in New York City is very expensive, and taxes add a whole new level to expenses. A bright light in the city is tax benefits. One of the best is the NYC Cooperative and Condominium Tax Abatement.

If you're thinking about buying a co-op in NYC, this abatement can save you a significant amount of money. 

hash-markWhat Is a Co-Op Tax Abatement Assessment?

A co-op tax abatement assessment is an assessment that works to allow co-ops and condominiums to make a little extra money on the side. It doesn’t require the shareholders to pay anything more - instead, it comes from the city itself. This money goes to anyone who owns a piece of the building after the property value is looked at in full.

New York can determine what the property tax will look like for the building after an assessment happens. It can go up or down depending on what the property value turns out to be once the process is complete. 

The owner of the building can use this money for repairs and general maintenance. To collect the tax benefit, the owner uses the NYC Cooperative and Condominium Tax Abatement.

hash-markDefining the NYC Cooperative and Condominium Tax Abatement Program

What exactly is this program? The tax benefit comes from the average value of what’s inside the building. The higher the property value, the lower the tax benefit from New York City.

On average, property owners in New York City can save anywhere between 17% and 28% with this relief. Four divisions divide residences in the NYC Cooperative and Condominium Tax Abatement.

The four types of benefits that can come include these values:

  • $50,000 or less means a 28.1% tax benefit
  • $50,001 to $55,000 means a 25.2% tax benefit
  • $55,001 to $60,000 means a 22.5% tax benefit
  • $60,001 or more means a 17.5% tax benefit

These tiers help designate what the city of New York will give back to property owners after an assessment. 

We’ve talked about what an assessment is and the tax cuts values with each property value. So, how does this tax abatement assessment work in NYC? Let’s dive into that topic next.

hash-markHow a Tax Abatement Assessment Works in NYC

If you want to perform a tax abatement assessment in NYC, you need to be part of a co-op board. They work together to determine if they desire this assessment to occur in a building. Property owners and even shareholders can’t decide this by themselves. Instead, they will see a pair of line items in their bank statement confirming the decision made by the board.

A tax abatement assessment then works like this:

  • Shareholders receive debit property value assessment in their accounts
  • Debit distributes evenly among the owners
  • Property owners get credit for tax abatement

These steps ensure the tax abatement comes out evenly amongst all owners and shareholders of the building.

From here, the city of New York will not require the owners to pay additional money. This action happens after the tax abatement has been officially assessed and processed. A tax abatement assessment is cut and dry in New York City, once the co-op board sets everything into action.

hash-markWho Qualifies for a Co-Op Tax Abatement in NYC?

So, who qualifies for a co-op tax abatement in NYC? Some specific individuals qualify for this particular benefit. Not everybody gets access to this abatement, and some requirements help determine which co-ops qualify and which ones fall short of this benefit.

You qualify for a co-op tax relief in New York City if your co-op board:

  • Has informed of leadership shifts by February 15th
  • If the co-op unit is the owner’s residence
  • Purchased the building before January 5th for the coming year
  • Determine the building is a Class 2 property
  • Determine the building is not owned by an LLC

You can read the complete list of rules and regulations right here.

Due to these requirements, it becomes clear that not everyone can achieve an NYC Cooperative and Condominium Tax Abatement, even if you do own a building in New York City. Ensure you catch up on these regulations to ensure you meet the standards before you attempt to get an official assessment.

hash-markWhy Don’t Condos Have the Same Tax Abatement Chances as Co-Ops?

Once you look further into this tax abatement, you’ll realize that condos don’t have the same chances with tax abatements as co-ops do. What’s up with this? Why do the opportunities differ from each other? If you are considering buying a condo in NYC, read on. 

The way condos gain ownership differs from the way co-ops are. Because of this, New York City looks at them differently with things like taxes.

Tax relief for each of these will look like this:

  • Condo owners have individual tax abatements on quarterly tax bills
  • Co-ops receive individually, as mentioned above

These are how condos differ from co-ops.

If these differences were not in play, the condo board could take advantage of the financial benefit and leverage it. They have less power.

hash-markHow Can Condo Owners See if They Have the Tax Abatement?

If a condo owner thinks they have a tax abatement at their disposal, how can they check and see if they have this benefit? There are a few methods they can take advantage of to answer this question.

Condo owners can check to see if they have a tax relief by doing the following:

  • Checking quarterly property tax bills online
  • Looking at mailed property tax bills

Looking at these two methods should be simple, as you’ll get these statements right from your bank.

Online, you need to input your address and unit number to discover if you received tax relief on your condo. Tax abatements are an excellent way to work with the high tax system at work in New York City.