What Is a Co-op Tax Abatement Assessment in NYC?

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/

What is a co-op tax abatement assessment? We will demystify this topic in the following video. I'm Nick at Hauseit. Visit our website https://www.hauseit.com to learn about ways to reduce your closing costs and save money when buying and selling in New York City. So, let's get started.

So, what is a co-op tax abatement assessment? A co-op tax abatement assessment is used by co-ops as a way to capture the co-operative and condominium tax abatement amount which is paid by the New York City Department of Finance to owners in the city who use an apartment as a primary residence. The co-op/condo tax abatement helps individual owners save anywhere from 17.5% to 28.1% on their property taxes. This abatement was introduced to level the playing field between one to three family homes which are taxed at a significantly lower rate. Here in New York City property taxes are reduced by 17.5% for properties with an average assessed value of $60,001 and above. Property taxes are reduced by 28.1% for properties with an average assessed value of $50k or less, based on a sliding scale.

The co-op/condo tax abatement is intended for homeowners who live in their apartment as their primary residence. This means that investors buying property in an LLC or well-off people buying a second home in the city are excluded. Eligible condo unit owners receive the abatement directly since condo owners pay their property taxes individually to New York City. Co-op buildings on the other end pay property taxes directly on behalf of all owners therefore co-op buildings receive the abatement directly from New York City. It's quite common in New York City for co-ops to levy an assessment equal to the amount of the tax abatement being paid by the city.

This means that the co-op doesn't actually pass the abatement proceeds directly to shareholders. Instead, the co-op corporation simply pockets the money. Implementing a tax abatement assessment is an easy way for co-op building to fortify its finances without having to raise monthly maintenance. Furthermore, a tax abatement assessment is less painful to shareholders since they don't have to physically come up with the cash to pay the assessment. A co-op tax abatement assessment is also used as a strategy to increase the unit owner's cost basis thereby reducing any capital gains tax payable when selling.

We hope you found this video helpful. I'm Nick at Hauseit. Visit our website https://www.hauseit.com to learn about ways to save money when buying and selling here in the city. And if you like this video do us a favor hit like, subscribe and leave us a comment and we'll do our best to get back to you we hope to see you on the next one!

Save 2% When Buying in NYC: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
NYC Buyer Closing Cost Calculator: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
.
.
Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
_
#hauseit #hauseitnyc