Pied-à-Terre Owners Cope With Loss of Separate Abatement
Owners of pieds-à-terre in New York City are about to face another financial repercussion, though this time, the mayor isn’t to blame.
Those facing a surcharge on their non-primary condominiums and co-ops are also losing a tax abatement tied to 467-a, the Wall Street Journal reported. Among the prominent victims of this second hit are special envoy Steve Witkoff.
It’s well known at this point that Mayor Zohran Mamdani and his administration are pushing to implement a surcharge to one-, two- and three-family homes valued at more than $5 million, along with condos and co-op units with assessed values of $1 million or more. The administration is fighting three separate lawsuits over the controversial tax.
Less known is the 467-a tax abatement, which was instituted 30 years ago. Under New York State Real Property Tax Law, eligible co-op shareholders and condo unit owners may realize a reduction on property taxes ranging from 17.5 percent to 28.1 percent, based on their unit’s assessed value.
There are a few restrictions. Owners must be listed as individuals — not limited liability companies, for instance — and can’t own more than three units in the same building.
Most critically, however, is that the unit must serve as their primary residence. By definition, co-op and condo owners being hit by the pied-à-terre tax also should not benefit from the 467-a abatement.
A building’s board or manager is responsible for having accurate information about primary residences, but they typically gather it by sending out questionnaires or queries that go unanswered, creating a communication block. Those who don’t study their tax bill may not even know they were benefitting from it, or at least that’s what some claim.
Witkoff’s representatives said the envoy didn’t and that the real estate scion recently repaid the city $78,000 for the time he was ineligible for it after moving to Florida. Others who have received the abatement in recent years include real estate executive Lee Millstein, hedge fund manager Ruben Kliksberg and financier Ronald Olin.
Meanwhile, the Mamdani administration recently extended the deadline for filing pied-à-terre tax exemption applications, though that date has since passed.
Although a lower court previously ordered the administration to nullify notices and restart the process, an appellate stay allows implementation and legal appeals to proceed.
Read more
Pied-à-terre tax exemption deadline gets extended… again
NY Dirt: Mamdani admin goes to bat for pied-à-terre tax rollout
Lawyers scramble to exempt misapplied pied-à-terre tax
