New York City Interest Rate Reduction for Late Payment of Real Property Taxes
9.3.20 | Client Alert – COVID-19 Update
New York City recently enacted legislation (Local Law 62 and Local Law 63) which reduces the late payment interest rate for property taxes that were due on July 1, 2020, for eligible property owners who have been impacted by COVID-19. The interest rate relief is divided into the multiple categories detailed below.
Certain Properties Billed Semiannually
Pursuant to Local Law 62, the interest rate is reduced from 18% to 7.5% from July 1 through October 15, 2020, for eligible property owners who are billed semi-annually and own property with an assessed value of more than $250,000.
To qualify for the reduced interest rate, owners must own one of two types of properties:
- Buildings with 30 or fewer residential units, representing more than half the space of the building, at least half of which are rent-regulated, (in accordance with the emergency tenant protection act of 1974, the rent stabilization law of 1969, the local emergency housing rent control act of 1962). These owners must have seen a decrease in income of at least 25% from March 7 through June 30, 2020, compared to the same period in 2019, due to COVID-19.
- Class 4 commercial buildings with an assessed value under $750,000 that have seen a decrease in business income from the property of at least 50% from March 7 through June 30, 2020, compared to the same period in 2019 due to COVID-19.
Certain Properties Billed Quarterly
Pursuant to Local Law 63, the interest rate is reduced from 3.25% to 0% from July 1 through September 30, 2020, for eligible property owners who are billed quarterly and own property with an assessed value of $250,000 or less.
To qualify for the abatement of interest, the owner’s property must be a tax class 1 one-, two-, or three-family home, or a condominium, and be the owner’s primary residence for an uninterrupted period of at least one year prior to July 1, 2020. In addition, the owners must have an income of less than $150,000 and must have been impacted by COVID-19, either through their own illness or that of a household member, or through the loss of a primary source of income due to COVID-19.
Frequently Asked Questions and Answers
Question 1: How can I apply for the interest rate reduction?
Question 2: When is the deadline for filing the application?
The application should be filed by September 30, 2020.
Question 3: Who is considered the “owner” of real property for purposes of qualifying for interest rate reduction for late payment of New York City real property tax?
Under Local Law 62, “owner” means a person who is liable for payment of the real property tax on the subject property. Local Law 63 does not define “owner” but presumably the same definition applies.
Question 4: I own multiple condominium units in one building in New York City, none of which are my primary residence. Will my condominium units qualify for the interest rate reduction?
We think that the interest rate reduction would not apply in this scenario. The interest rate reduction applicable to residential condominiums applies to the owner’s primary residence.