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.
The tax man
Keeping a place in the city has never been an easy or cheap proposition for out-of-towners, but it has now become a good deal more costly, after state legislators declined to extend a long-standing tax abatement to pied-à-terre owners.
The State Legislature, when it resumed after the New Year, voted to extend the co-op and condo tax abatement—which has been received by nearly all co-op and condo owners—through June 30, 2015.
However, the new extension applies only to primary residences (granted, one can get the abatement on up to three residences in one building, so the law is not completely insensitive to the needs of the well-to-do)—but it is the first time the benefit has been restricted based on residency since it was enacted in 1996.
Time. We really have so little of it. Just a few years ago it seemed like condo and co-op owners had all the time in the world with their beloved tax abatement and now it’s expiring.
There are plenty of abatements out there, of course—ones for new construction and capital improvements, senior citizens and veterans, but this one is special. This is the one that gives a generous 17.5 percent property tax reduction to just about all co-op and condo owners. And it’s going to die on June 30 if an extension doesn’t come along to save it.
The situation has looked bad before, of course. The abatement, first passed in 1996 to help offset the disparity between the tax rates of co-op and condos versus one- to three-family houses, has required several renewals. Still, have things ever been this dire?