Real Property Tax Abatement for Major Capital Improvements (“MCI”) for Rent Regulated Class 2 Properties

Proposed Rules: Closed to Comments

Agency:
Comment By: 
Wednesday, May 16, 2018
Download Copy of Proposed Rule (.pdf): 

STATEMENT OF BASIS AND PURPOSE

The purpose of this proposed rule is to set forth which rent–regulated class two real properties are eligible for a Major Capital Improvement (“MCI”) tax abatement, as well as how such abatement shall be calculated. An MCI is a rent increase for a building wide improvement for a rent-regulated class two property which has been approved by the New York State Division of Housing and Community Renewal (“DHCR”). A building is eligible for this tax abatement if it is subject to either the emergency housing rent control law or to the rent and rehabilitation law of the city of New York enacted pursuant to the emergency housing rent control law or to the emergency tenant protection act of 1974.

The MCI tax abatement is intended to partially offset the economic loss imposed upon eligible building owners due to the recent changes in the amortization period for major capital improvements. The amortization schedule for major capital improvements has been increased from 7 to 8 years for eligible buildings with 35 units or less and has been increased from 7 to 9 years for eligible buildings with more than 35 units. The formula used to calculate the value of the MCI tax abatement will provide eligible building owners with a tax abatement equal to 50% of the economic loss due to the changes in the MCI amortization schedule. Property owners must submit an application for a MCI tax abatement no later than five years after the date of the order issued by the New York State Division of Housing and Community Renewal granting an MCI rent increase.

The Department of Finance’s authority for these rules is found in sections 1043 and 1504 of the New York City Charter and paragraph 6 of subdivision c of section 26-511 and subparagraph g of paragraph 1 of subdivision g of section 26-405 of the administrative code of the City of New York. The enabling legislation for MCI tax abatements is set forth in Real Property Tax Law Section 467-i, sections 29, 31-32, 64-a and 65 of chapter 20 of the New York State Laws of 2015. A new chapter 56 is being added to Title 19 of the Rules of the City of New York to set forth the rules for MCI tax abatements.

Public Hearing
Subject: 

Real Property Tax Abatement for Major Capital Improvements (“MCI”) for Rent Regulated Class 2 Properties

Public Hearing Date: 
Wednesday, May 16, 2018 - 11:00am
Contact: 

Sign up before the hearing by calling Joan Best at (718) 488-2007, or submit comments through the NYC rules website: http://rules.cityofnewyork.us. or email comments to laroset@finance.nyc.gov. or mail comments to NYC Department of Finance, Legal Affairs Division, 345 Adams Street, 3rd Floor, Brooklyn, N.Y. 11201, Attn: Timothy LaRose. Also you can fax comments to NYC Department of Finance, Attn: Timothy LaRose, at (718) 488-2491.

Location: 
NYC Department of Finance, Legal Affairs Division
345 Adams Street, 3rd Floor
Brooklyn, NY 11201