Jan 29, 2013

NY State Renews Coop/Condo Abatement



The New York State Legislature passed an Omnibus Housing bill yesterday that renews the coop/condo abatement and J-51 programs and amends the certain provisions of the 421a program.

REBNY worked vigorously over the last six months for the early passage of this legislation which was agreed to at the end of the 2012 legislative session.

The bill was sent to the Governor today for his signature which is required for the bill to become law.  

A brief explanation of the bill’s provisions is below.

Coop/Condo Abatement

The coop/condo abatement would be extended for three years.  However, to be eligible for the abatement, the unit must be the primary residence of the unit owner.  A unit owner may still receive an abatement for up to three units, provided they are in the same building and one of the units is the owner’s primary residence.  In addition, the thresholds for an abatement were modified as described below.

Average AV:
≤$50,000
$50,000-$55,000
$55,000-$60,000
>$60,000
FY2012
25%
22.5%
20%
17.5%
FY2013
26.5%
23.8%
21.2%
17.5%
FY2014
28.1%
25.2%
22.5%
17.5%

For non-primary residence coops/condos where the unit received an abatement in FY2011 the abatement will phase out according to the schedule below.

Average AV:
≤$15,000
>$15,000
FY2012
12.5%
8.75%
FY2013
6.25%
4.375%
FY2014
0%
0%

J-51

The J-51 program, which provides a tax benefit for the renovation of existing housing, would be extended three years.  However, the amendments would eliminate benefits for the conversion of commercial space to residential use and limit the eligibility for condominium and cooperative buildings with units whose average assessed value per unit is >$30,000.  However, projects that receive “substantial government assistance,” which is defined to include city, state, or federal loans or grants, are not subject to this cap.  Likewise, conversion projects receiving substantial government assistance would be eligible for J-51 benefits.

421a

The amendments to 421a would encourage new residential development in high density 15 FAR districts in Midtown and Downtown Manhattan. In the modification to the program in 2007, the renewal of this separate provision was accidentally omitted.  This amendment was intended to restore the benefits that have been part of the program since 1993.  In addition the bill restores flexibility in the completion of construction provisions that are crucial to the resumption of stalled housing projects.

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