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NYC handed out $6.5 million in tax breaks to ineligible homeowners, comptroller says
By
David Brand
Published Oct 24, 2024
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Gary Hershorn/Getty Images
By
David Brand
Published Oct 24, 2024
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New York City’s Department of Finance mistakenly handed out $6.5 million in tax breaks to the ineligible owners of hundreds of co-op and condo units over the past five years, according to a new audit by the city comptroller’s office.
The auditors found the finance department granted the improper tax breaks through the Cooperative and Condominium Tax Abatement program, incorrectly waiving payments for owners of at least 678 condo and 42 co-op units who didn’t meet program requirements during the 2023 fiscal year. To qualify, owners must designate the unit as their primary residence and own no more than three units in the same building.
The city issued financial relief for nearly 300 condos and co-ops owned by limited liability companies or other businesses, and more than 200 designated for non-residential use — including 93 parking spots — according to Comptroller Brad Lander's office. Another 27 recipients also got the tax break for their condos and co-ops in other buildings, violating the primary residence requirement.
Dozens of other recipients were already benefiting from a separate abatement that was supposed to preclude them from the co-op and condo program, the audit found. The abatement cuts recipients’ tax bills by up to 28.1%, depending on the average assessed values of the homes in a building.
Lander said the audit revealed “serious holes” in the tax break system administered by the city’s finance department.
“The Co-op/Condo Abatement is meant to help people who live and work in New York City achieve the elusive dream of homeownership, not to pad the profits of businesses,” he said in a statement. He recommended that the city recover the improper tax breaks and do a better job auditing itself in the future to identify ineligible tax break recipients.
Department of Finance spokesperson Ryan Lavis said the agency determined the causes for the mistaken abatements and “implemented measures to prevent similar occurrences in future fiscal years."
In a response included in the comptroller’s audit report, the finance department said it would only recover the money it waived for condos owned by businesses. The agency cited existing policy that it does not claw back abatements “granted due to errors in our processes.”
The finance department issued a combined $659 million in tax breaks to the owners of more than 300,000 units in the 2023 fiscal year. The comptroller’s audit found the agency mostly ensures that owners qualify for the tax breaks before receiving them.
New York City’s property tax system is the subject of an ongoing lawsuit filed by homeowners and real estate trade groups who say it violates the federal Fair Housing Act by imposing disproportionately higher tax rates on owners in lower-income communities.
Mayor Eric Adams pledged to overhaul the tax system during his 2021 campaign but has not yet pursued any reforms while in office. Adams now faces federal criminal charges that could make it difficult for him to push through big policy goals before his term expires at the end of 2025.
Lander monitors the city’s finances as comptroller and is one of at least five Democrats challenging Adams in next year’s primary election.
Tagged
new york city
economy
housing
David Brand
David is a reporter covering housing for Gothamist and WNYC. Got a tip? Email [email protected] or Signal 908-310-3960.
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