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Editorials
Taxpayers have been led to believe that municipalities across New York State are committed to fair and equitable assessment practices that lead to fair distribution of the local property tax burden.
As so many municipalities have already done, the Towns of Orchard Park and Elma have passed resolutions memorializing Albany regarding the valuation of Condominiums.
Using similar resolution language, the Towns cite that increasing un-funded state mandates continue to shift the burden of supporting state programs with local property taxes.
NYS Real Property Law 581 and 339-y require condominiums to be assessed at a value substantially less than comparable non-condominium properties, thereby disrupting the desire and credibility of local officials to deliver a fair property assessment.
The Condominium Law's original intent was to give property tax relief to high-rise buildings four or more stories in height, where land ownership was absent and common walls were the norm.
For several years, municipalities throughout state and the New York State Assessors Association have memorialized Albany to reform Condominium Law 339-y. Prior bills to do so were drafted and died in committee, never reaching Senate or Assembly floors for an official vote.
NYS Real Property Law 581 and 339-y create a disadvantage to current property owners whereby their property does not have this exemption and it lessens their ability to compete when selling and marketing their property.
Comments from the NYS Assessors’ Association, Inc.
Senator Little (S.7727) and Assemblyperson Galef (A.10730) have presented respective drafts to Standing Committees that would allow municipalities an option to base assessments on condominiums and cooperatives at real market value.
A correspondence submitted to the Senate and Assembly by the NYS Assessors Association best describes the Condominium Law perversion being used by developers and builders as a marketing tool and the resulting assessing inequity.
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Cooperative and condominium properties, which are essentially single-family residences, are currently required to be assessed as income-producing properties. As a result, the derived values bear no relationship to the properties market value. All properties should be assessed using the same methodologies available to the Assessor and not artificially restrict the means of estimating the market value.
There has been an abuse by developers recently whereas they have been constructing traditional single-family homes but putting them in condominium ownership to take advantage of the de facto exemption of up to 50% of the market value due to the restrictions placed on the assessor in the method required to value such property. This has given the owners of these properties an unfair tax advantage over all the other real property owners within their municipalities.
We have long sought to remove the inequities that have been created by the restrictions of RPL 339-y and RPL 581. When you see pictures of two structures that sell for the same price and one pays $2,500 in taxes and the other pays $4,386, only because of the form of ownership, you can see that the law has to change.
The reason for this discrepancy is that condominiums are receiving the benefit of the valuation limitation of section 339-y of the RPL, while the single-family home, owned in fee simple, is generally assessed upon its “market value”, forcing the single-family home owner to pay a much greater tax bill than their condominium-owing neighbor.
The market place does not give us the type of data that is required to assess this type of structure as an income-producing property. They are constructed, marketed and sold for single-family ownership not as investment properties and should be assessed in the same manner as other single-family homes.
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The State Senate and Assembly have adjourned for the year without taking any action in regard to this problem. Despite the relentless pursuit by municipalities and the NYS Assessors Association throughout the years, and the call for reform by beleaguered taxpayers, Albany once again seems to be kowtowing to the Builders Association lobbyists and refuses to bring the reform draft to vote.
Tax inequity impacts
Until recently, the Town of Lancaster has not been subjected to such marketing ploy. However, since Pleasant Meadows applied for and received 339-y approval for the 110 patio home development, and will be seeking such consideration for their upcoming townhouse project, the adverse impacts can be clearly noted.
Town Assessor Dave Marrano recently informed the board that approximately $16 million in revenue will be lost because of the 339-y Pleasant Meadows development consideration; revenue that will have to be made up by the rest of the town taxpayers.
Parkhaven Development, at Bowen Road and Broadway, commenced developing a patio home subdivision, with an association and without applying for 339-y consideration; essentially a realty subdivision.
Already marketing and building several patio homes, but unable to sell them because of the tax breaks Pleasant Meadows was offering prospective homebuyers, Parkhaven decided to dissolve his prospectus and association status and refile for condominium 339-y status.
Despite the fact that municipalities have instated “no conversion” ordinance that disallows cooperatives and condominiums from like dissolution and refilling for 339-y consideration, Parkhaven was granted condominium status in April of 2008, prior to the tax status date of May 1st.
Lancaster had retained legal counsel to determine whether Parkhaven’s 339-y granting was legal. It is the opinion of the State Attorney General’s office that as no built units were sold and no association fees were collected to maintain the property, the rewritten prospectus as a condominium association was approved.
The difficulty lies in the ease in which a development can receive condominium status. An application to the State Attorney General is almost a formality in receiving condominium status.
It still does not satisfactorily answer why condominium status was granted when homes were already marketed and built and that several of the units were occupied – even though the developer claimed occupancy permits were granted and that the units were being rented. Hmmm!
Regardless, the slippery slope perversion of the NYS Real Property Law Section 339-y needs reforming and/or giving municipalities throughout the state the opportunity to opt out its consideration. Anything less creates a disadvantage to other builders not seeking its status, homeowners have like structures and associations that are denied like considerations because of “no conversion “ ordinances and all town property taxpayers that are subjected to paying higher taxes to pick up the lost revenues.
However, we are asking the country’s most inept and dysfunctional state government to do the right thing; a government that is more responsive to lobbyists that to its residents.
Is there light at the end of the tunnel? Don’t hold you’re breath waiting for change!
© Copyright 2008 by Speakupwny.com
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