Tax the Rich
It’s a story that pops up every few years: New York City’s co-operative apartments—especially those on the Upper East and West Sides and in the wealthiest neighborhoods in brownstone Brooklyn—pay next to nothing in property taxes, leaving massive tax burdens for poorer renters.
Back in 2009, for example, the Manhattan Institute found that 740 Park Avenue, that limestone-faced bastion of privilege home to billionaires like David Koch, was taxed as if it were a postwar rent-stabilized building in Yorkville.
According to a report released today (.pdf) by the Furman Center for Real Estate and Urban Policy at New York University, nothing’s changed.
The tax man
During the past decade, it has become increasingly popular for home buyers—particularly those with bold-faced names—to shield their identities with LLCs and trusts. By using an LLC, a privacy-minded person can (usually) prevent sleuths from salmon-colored papers like this one from dredging up their purchase from city records and exposing how much they paid and what their new kitchen looks like.
But while such identity cloaking has become all but de rigueur for the celebrity buyer and a matter of preference for other press-averse people, the cost of privacy is poised to go up considerably. That’s because the city’s co-op and condo tax abatement, which has been enjoyed by nearly all co-op and condo owners at a sizable 17.5 percent since 1996, will no longer be available to those who own their apartments through LLCs or trusts. The change will mean considerably higher taxes for some 7,700 property owners.
Governor Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver held a celebratory news conference last week during which they announced an agreement on implementing a 2 percent cap on property tax increases. Welcome though that announcement was, it’s clear that the work of achieving real property tax reform is far from over. Read More