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Old 02-11-2009, 06:16 AM
 
39 posts, read 109,371 times
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Default Tax abatement on condo? What happens when it ends?

I'm just now beginning to look around at condos in Brooklyn, mostly in the Bay Ridge area and notice that most of them say "x year tax abatement left." I know that a tax abatement means you pay less tax for a period of time, but what happens when that runs out?

For example, a $350k condo with an 6 year tax abatement left might be something that I could afford, but what would the increase be in six years when the abatement expires? I've been looking online and haven't found too much info.

Thanks for any help.
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Old 02-11-2009, 06:32 AM
 
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If the value of the unit is more than $15,000, you have a 17.5% abatement. Thus, you're paying 82.5% of the tax NOW. Tack on the difference to get the tax to be paid when the abatement expires.
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Old 02-11-2009, 07:02 AM
 
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Be wary of the tax abatement issue with some condos. When you factor in the eventual increase in common charges due to this plus other items that can cause that monthly payment to increase, it can be a serious factor in evaluating the desirability of a specific condo purchase.

The NYT had a great article this past weekend on issues facing some condos today and it includes reference to expiring tax abtements. Good luck!

http://www.nytimes.com/2009/02/08/re...ref=realestate
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Old 02-11-2009, 07:15 AM
 
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Thank you both!

Miles, I read that article yesterday and it caused me great concern so I started researching it, found nothing and that prompted my post this morning.

Thanks again.
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Old 02-11-2009, 07:23 AM
 
3,225 posts, read 5,270,352 times
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Quote:
Originally Posted by nygeek View Post
Thank you both!

Miles, I read that article yesterday and it caused me great concern so I started researching it, found nothing and that prompted my post this morning.

Thanks again.
Hi nygeek, can you ask your attorney, agent, or the condo board to provide some details on what your payment will be when the abatement expires? Viral gave some guidance. You might also want to research whether there's a gradual phase-in as occurred for some owners mentioned in that article.

Best.
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Old 02-11-2009, 09:37 AM
 
1,111 posts, read 2,935,134 times
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Quote:
Originally Posted by Viralmd View Post
If the value of the unit is more than $15,000, you have a 17.5% abatement. Thus, you're paying 82.5% of the tax NOW. Tack on the difference to get the tax to be paid when the abatement expires.
Is it a set percentage? My understanding was that the property value gets re-assessed by the city to determine what the annual property tax will be, which then gets allocated amongst the owners?
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Old 02-11-2009, 09:39 AM
 
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It varies, but overall, for a unit worth more than $15,000, you can get a 17.5% abatement...
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Old 02-11-2009, 10:51 AM
 
Location: Beautiful Pelham Parkway,The Bronx
6,509 posts, read 11,038,852 times
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Quote:
Originally Posted by Miles View Post
Be wary of the tax abatement issue with some condos. When you factor in the eventual increase in common charges due to this plus other items that can cause that monthly payment to increase, it can be a serious factor in evaluating the desirability of a specific condo purchase.

The NYT had a great article this past weekend on issues facing some condos today and it includes reference to expiring tax abtements. Good luck!

http://www.nytimes.com/2009/02/08/re...ref=realestate
Miles,

Thanks for the link to this article.

The potential ramifications of expiring abatements in combination with everything else (layoff's,decreasing values and balloon financing) is a little scary.. especially for people who have bought or are thinking about buying in newer condo developments.

I never really got such a wide picture until reading this but when I was looking for a place recently I did notice that there seemed to be many more foreclosures in condos than in coops when I looked all of the buildings up on Property Shark. It made me nervous and was one of the reasons that I decided to buy in an older, well established coop.I actually liked the idea that there were a lot of people in the building who paid like 60,000 for their apartments 20 years ago and who wanted to check me out first too, to make sure I wasn't getting in over my head.

This article is something that anyone who is thinking about buying right now should read and understand. Thanks
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Old 02-11-2009, 11:30 AM
 
39 posts, read 109,371 times
Reputation: 37
Quote:
Originally Posted by Miles View Post
Hi nygeek, can you ask your attorney, agent, or the condo board to provide some details on what your payment will be when the abatement expires? Viral gave some guidance. You might also want to research whether there's a gradual phase-in as occurred for some owners mentioned in that article.

Best.
I don't have any of the above. I was just browsing around at what was available on the off chance that we might be able to afford something. Many of the listings mentioned this abatement and that began my quest for info about it.

The best thing for us at this point is to just keep an eye on what's out there.
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Old 02-11-2009, 01:38 PM
 
3,225 posts, read 5,270,352 times
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Quote:
Originally Posted by bluedog2 View Post
Miles,

Thanks for the link to this article.

The potential ramifications of expiring abatements in combination with everything else (layoff's,decreasing values and balloon financing) is a little scary.. especially for people who have bought or are thinking about buying in newer condo developments.

I never really got such a wide picture until reading this but when I was looking for a place recently I did notice that there seemed to be many more foreclosures in condos than in coops when I looked all of the buildings up on Property Shark. It made me nervous and was one of the reasons that I decided to buy in an older, well established coop.I actually liked the idea that there were a lot of people in the building who paid like 60,000 for their apartments 20 years ago and who wanted to check me out first too, to make sure I wasn't getting in over my head.

This article is something that anyone who is thinking about buying right now should read and understand. Thanks
Hi bluedog. I'm glad that the link was useful. Indeed, there are advantages as well as disadvantages for almost every type of housing - co-ops, condos, townhouses, detached homes. One has to carefully evaluate the pros and cons of each in the context of what one is seeking and one's own lifestyle and financial background and choices.

Bluedog, enjoy your co-op purchase and I'm glad I could share something of value (other than my usual corny jokes here! lol).
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