New York Assembly Bill A10600

Overview

The New York Assembly Bill A10600, introduced by the Rules Committee at the request of Assemblymember  Rajkumar, aims to reform real property tax laws in New York City. The bill, cited as the “Five Borough Fair Property Tax Act,” is divided into six parts (A through F), each addressing different aspects of property tax reform, including the abolition of the class share system, establishment of homestead exemptions, introduction of a circuit breaker tax abatement, and revisions to the assessment of residential properties.

Part A: Abolition of Class Share System

This part amends the Real Property Tax Law by introducing a new classification for one, two, and three-family residential properties in cities with populations over one million. This new class, Class One-A, includes:

• Owner-occupied mobile homes and trailers
• One-family house structures on cooperative-owned land
• Certain vacant lands adjacent to residential properties

The section also outlines a phase-in period for adjusting property tax rates and mandates the assessment of all properties at 100% fair market value.

Part B: Homestead Exemption

This part establishes a homestead exemption for Class One properties in New York City, exempting portions of the property used as the primary residence from taxation based on annual income. The exemption rates are scaled as follows:

• Up to $375,000: 20%
• $375,000 – $400,000: 16%
• $400,000 – $425,000: 12%
• $425,000 – $450,000: 8%
• $450,000 – $475,000: 4%
• $475,000 – $500,000: 2%

The exemption is applicable to both traditional and cooperative housing units.

Part C: Circuit Breaker Tax Abatement

This part introduces a property tax abatement for homeowners whose property tax liability exceeds 10% of their household income. The abatement is structured as follows:

• $58,000 or less: 100% of the excess tax
• $58,001 – $65,000: 78% of the excess tax
• $65,001 – $70,000: 63% of the excess tax
• $70,001 – $75,000: 48% of the excess tax
• $75,001 – $80,000: 32% of the excess tax
• $80,001 – $85,000: 17% of the excess tax
• $85,001 – $100,000: 2% of the excess tax

Part D: Assessment Revisions

This part repeals section 581 of the Real Property Tax Law and amends several related provisions, focusing on the assessment methods for residential properties, particularly cooperatives and condominiums. The aim is to ensure fair and uniform property assessments.

Part E: Cooperative Housing Information Returns

This part repeals section 467-a of the Real Property Tax Law and mandates annual information returns from cooperative housing corporations regarding the transfer of shares and other relevant data.

Part F: Determination of Fair Market Value

This part assigns the responsibility of determining the fair market value of real properties in New York City to the city’s Commissioner of Finance, ensuring assessments reflect true market conditions.

Key Takeaways

1. New Property Class: Introduction of Class One-A for specific residential properties in large cities.
2. Homestead Exemption: New exemptions based on income for primary residences in New York City.
3. Circuit Breaker Abatement: Tax relief for homeowners with property taxes exceeding 10% of their income.
4. Assessment Reforms: Repeal and amendment of laws to improve the assessment of residential properties.
5. Enhanced Reporting: Mandatory annual information returns for cooperative housing corporations.
6. Fair Market Value: New responsibility for determining property values assigned to the Commissioner of Finance.

The bill is designed to implement comprehensive property tax reforms in New York City, making the system more equitable and transparent for homeowners.  To read the full bill please click here: a10600