Property owners can defer or pay fractions of taxes amid crisis

Gwen Everett

Crain’s NY Business

March 25, 2020

The City’s Department of Finance is offering property owners facing financial hardship the ability to defer or pay a small percentage of their property taxes.

The program, which offers three different payment plans, allows property owners to defer paying as much of 25% of the equity on a one to three family home, and 50% of the equity on a condominium, according to the Department of Finance.

It’s one of a series of public programs officials have announced in the past week to provide relief to people who fear losing their homes from the economic fallout of the Covid-19 crisis. Many of those programs have happened at the state level — New York issued a directive to waive mortgage payments for 90 days, and a freeze on foreclosures and evictions for 90 days. But this program also applies to New York City residents. 

“These are unprecedented times for New Yorkers, many of whom now find themselves struggling to make ends meet,” said Department of Finance Commissioner Jacques Jiha. “Through our programs, DOF hopes to ensure we do our part to help those who are struggling have one less burden to deal with as we work toward economic recovery.”

One payment plan for seniors allows those homeowners to partially or fully defer payments on late and future property taxes, for either a set or indefinite time period. The two other payment plans, the extenuating circumstances income-based plan and the fixed-term income-based plan, both limit property tax payments to 8% of their adjusted gross income. 

The extenuating circumstances plan lasts as long as a hardship such as death, serious illness, loss of income continues. The fixed-term plan only applies to the late payments plus payments projected to be due in the next year. 

City taxes on properties worth under $250,000 are due April 1. Taxes on properties worth more than $250,000 are due July 1.

IMPORTANT NOTE - The content of this post was emailed to NYSLTA Members on October 30, 2019.

That email included an addendum to the TP-584, which was inaccurate.  The file attached to this page is a corrected version and may be used anywhere in NY state, including NY City.

The purpose of this memo is to clarify the impact of the changes to Section 1409(a) of the New York Tax Law, which became effective September 13, 2019.

As you are aware, the new legislation requires the real property transfer tax return (the TP 584 and the TP584-NYC) relating to residential property (containing one- to four-family dwelling units) sold or purchased by a “Limited Liability Company” (LLC) to disclose information on the ownership of such company.

The legislation requires that the TP584 and the TP584-NYC MUST be accompanied by documentation that identifies the names and addresses of all members, managers and other authorized persons of the LLC.

Further, if any member of the LLC is another LLC or other business entity, all shareholders, directors, officers, members, managers, partners and authorized persons of said LLC or business entity must be listed by name and address until “full disclosure of ultimate ownership by natural persons is achieved. 

We realize that in some cases (e.g. a publicly traded corporation) this requirement will be practically impossible to comply with; we have been unofficially advised that we should submit the addendum with a statement that the entity is a publicly traded corporation and that the Clerk’s should accept the deed for recordation.

Therefore,

• If you are recording a deed; AND
• it is for residential real property containing a one- to four- family dwelling unit, AND
• a grantor or a grantee is an LLC

an addendum must be attached to the TP584 or the TP584-NYC identifying the names and addresses of all LLC members.

Although the State has not promulgated an “official” addendum to the TP forms, we attach a link to a form which has been accepted by the County Clerks.

Click the link below for a sample addendum which can be completed and submitted to fulfill the above requirements.

The Department of Taxation & Finance provides some guidance and examples here: https://www.tax.ny.gov/bus/transfer/rptidx.htm#conveyances

The NYSLTA has been actively engaged with the Dept of Taxation & Finance, the County Clerks, and the State, City and County Bar Associations regarding the foregoing.

Additionally, we have reached out to the sponsors of the legislation to provide input when an amendment is under consideration.

Further memos with guidance will be issued by NYSLTA, if and when the New York State Department of Taxation and Finance issues same.

Two weeks ago, NYSLTA Members received an email alert to an important change in the exemption to the IDA mortgage tax.  Here is the alert we distributed on November 10, 2016.  Note - there has been some confusion about this change. We believe the information posted below to be complete and accurate.

A bill was passed by the State legislature and signed by Governor Cuomo.

This  bill currently in effect:

"prohibits Industrial Development Agencies (IDAs) from exempting the additional mortgage recording tax  imposed  on  properties located  within  the  Metropolitan Commuter Transportation District, the Niagara Frontier Transportation District, the  Rochester-Genesee  Transportation  District,  the  Capital District Transportation District, and the Central New York Regional Transportation District".

Attached is a link to Technical Memorandum, TSB-M-16(1)R, Industrial Development Agencies and Authorities in Transportation Districts No Longer Exempt from the Additional Mortgage Recording Tax. 

The bill was signed into law on September 30, 2016, and, as drafted, has an immediate effective date.    The approval memo signed by Governor Cuomo indicated that to allow for the completion of several projects, the governor and the Legislature agreed to a chapter amendment extending the effective date until July 1, 2017.   

However, until this chapter amendment is enacted, mortgages executed, given, made, transferred, or assigned by or to an IDA, an agent of the IDA, or an entity receiving financial assistance from an IDA are not exempt from the additional mortgage recording tax imposed by Tax Law section 253(2) when the real property that is subject to the mortgage is located in a county that is part of a transportation district.

https://www.tax.ny.gov/pdf/memos/mortgage/m16_1r.pdf