On December 27, 2022, Governor Kathy Hochul vetoed a bill that aimed to close a tax loophole for condominium owners in New York. The bill, which was passed by the state legislature earlier this year, would have required condominium owners to pay property taxes on the value of their units, rather than just the value of the land they occupy.
Current Law
Currently, condominium owners in New York are only required to pay property taxes on the value of the land their unit occupies, which can result in significantly lower tax bills compared to homeowners who own both the land and the structure on it. The bill that Governor Hochul vetoed would have eliminated this loophole, requiring condominium owners to pay property taxes on the full value of their units.
Arguments against the Veto
The bill’s supporters argue that closing the loophole would create a more equitable tax system, as it would ensure that all property owners are paying their fair share. They also point out that condominium owners benefit from many of the same public services as homeowners, such as police and fire protection, and should therefore contribute to the funding of these services through property taxes.
However, Governor Hochul and others who opposed the bill argued that it would unfairly burden condominium owners, many of whom are already struggling with high costs of living in the state. They also pointed out that the bill could potentially reduce the value of condominiums, as buyers would be less likely to purchase units that come with higher property tax bills.
Wrap Up
Despite the Governor’s veto, the bill’s supporters are vowing to continue their efforts to close the tax loophole. They argue that it is necessary to ensure that all property owners are paying their fair share and to address the state’s ongoing budget issues. It remains to be seen whether the bill will be reintroduced in the state legislature in the coming year.