Real Property Tax News

April 2017 Newsletter

Contents:

Tentative Assessment Roll Published: Page 1
Real Property Tax Law, Section 421a Exemption: Page 1
Tax Lien Sale: Page 1
Forms RPIE Filing Period Open: Page 2

FY 2018 (TAX YEAR 2017/2018) TENTATIVE ASSESSMENT ROLL PUBLISHED

Commissioner of Finance Jacques Jiha, PH. D announced the publication of the 2017 Tentative Assessment Roll on January 17, 2017.

Commissioner Jiha announced that the total Market Value for the upcoming tax year increased to $1.157 trillion, an increase of $93 billion or 8.74% from the 2017 fiscal year.

The total market value for tax Class Two properties increased $26.6 billion, or 10.4% to $283.4 billion. Class Two rentals saw a Market Value increase of 14.6% and an assessed valuation increase of 12.7%. The total assessed valuation for Class 2 properties increased 10.5% to $82 billion.

The total Market Value for Tax Class 4 commercial properties increased $24 billion or 8.6% to $302.7 billion. The total Assessed Value for Tax Class 4 increased 8.9%. Class 4 office buildings and retail saw an increase of 6.84% and 11.7%, respectively.

REAL PROPERTY TAX LAW, SECTION 421a EXEMPTION

The partial real property tax exemption for the new construction of multi-family rental housing expired June 15, 2015. The FY 2018 State Budget included a replacement for the 421a program. Details will be included in my next newsletter.

ANNUAL TAX LIEN SALE

The lists of the properties that are the subject of potential sale of tax liens have been published.

The last day to enter into an Installment Agreement (if eligible) is May 11, 2017.

The lien sale is scheduled for May 12, 2017.

If you have received a notice of tax sale lien eligibility please contact the Department of Finance immediately.

FORMS RPIE-2016

New for 2017: New forms for RPIE have been issued this year for:

Hotels, Adult care/nursing home facilities, gas stations, car washes, oil change facilities, self-storage, theatres, or concert halls.

If your property has a 2017/2018 Tentative Assessed Valuation of $250,000 or less and is not a hotel you can file a short form RPIE-2016. You can elect this option when you log on to electronically file your form RPIE-2016.

As the result of legislation passed by the State Legislature in 2013, Forms RPIE-2016 must be filed electronically with the New York City Department of Finance on or before June 1, 2017.

The New York City Department of Finance website is open for the filing of forms RPIE-2016 and you can now download both the 2016 Real Property Income And Expense Worksheet And Instructions at:

www.nyc.gov/rpie

However, the first thing to remind all taxpayers is that ALL RPIE forms must be filed ELECTRONICALLY.

The second thing to point out is that almost all taxpayers must file a form RPIE-2016 even if it is only to claim an exclusion from the filing requirement.

The following properties do NOT have to file an exclusion form:

Properties that have an Actual Assessed Valuation of $40,000 or less on the 2017/2018 Tentative Assessment Roll.

Residential properties containing 10 or fewer dwelling units.

Tax Class One or Tax Class Two properties with 6 or fewer dwelling units and no more than one commercial unit.

Special franchise properties.

As a result of the 2013 amendments to the statute, most property owners who do not file exclusion forms where they are NOT required to file forms RPIE-2016 are subject to the imposition of monetary penalties.

The Department of Finance website contains a list of RPIE-2015 non-filers who would be subject to enhanced penalties for failure to timely file forms RPIE-2016.

Third, all clients of this firm should forward copies of their RPIE-2016 filings AND Exclusion forms to this office as soon after filing with the Department of Finance as possible.

The deadline for filing for electronic filing waivers is May 2, 2017.

Who Is Required To File

The owner of an income producing parcel of real estate is required to file form RPIE-2016 electronically on or before June 1, 2017.

Which Properties Are Not Required To File

A property having a tentative 2017/2018 actual assessed valuation of $40,000 or less.

An exclusively residential property with ten or fewer units, this count includes all units whether occupied or vacant.

The property has both six or fewer residential units and no more than one commercial unit. This count must include all units, whether occupied or vacant and the property must be in Tax Class 1 or Tax Class 2. If your property has five residential units and two commercial units, you must file an RPIE because you have two commercial units.

Cooperatives that are exclusively residential or which have less than 2,500 square feet of commercial space, not including parking space. Owners claiming this exclusion must still complete form RPIE-2016 (Parts 1 and IV) to claim and certify this exclusion. A form RPIE must be filed for any units that remain unsold and owned by the Sponsor if 10% or more of the units remain unsold.

A form RPIE is not required for residential space in a condominium building/development, except that an RPIE must be filed for any units that remain unsold and owned by the Sponsor, if ten percent or more of the units remain unsold. For condominiums that contain commercial or professional space, an RPIE must be filed for the commercial and or the professional space. A form RPIE must also be filed for residential units that are rentals and not intended to be individually owned.

Properties that are income-producing only because of rent paid between related persons or entities. Please see the RPIE instructions on the Department of Finance website for the definition of related persons or entities.

Properties owned and used exclusively by government or nonprofit organizations and which is fully exempt from real property taxation.

The property is vacant and uninhabitable and has no existing leases. If there are any existing leases, a form RPIE-2016 must be filed.

Exclusively owner-occupied business operating properties, OTHER than the following:

Department stores with 10,000 square feet of floor area or more.

Hotels and motels.

Parking garages and parking lots.

Power plants or other utility property.

Self-storage warehouses.

Gas stations, car washes or theaters and cinemas or concert halls.

“Vacant, non-income producing land” applies to empty lots only.

The owner has not operated the property AND is without knowledge of the income and expenses for the entire calendar or fiscal year of the reporting period.

Non-Compliance Penalties

Required filers who do not file a form RPIE-2016 or Claim of Exclusion face the following penalties. Penalties are based on the 2016-17 Final Assessed Value of the property.

FY17 Final Assessed Value
From To Penalty Amount
$40,000 $99,999 $300
$100,000 $249,999 $750
$250,000 $499,999 $1,500
$500,000 $999,999 $3,000
$1,000,000 $4,999,999 $5,000
$5,000,000 $9,999,999 $20,000
$10,000,000 $14,999,999 $40,000
$15,000,000 $24,999,999 $60,000
$25,000,000+   $100,000

In addition to the monetary penalties described above, failure to file a required form RPIE-2016 will result in the New York City Tax Commission denying a hearing on a 2017/2018 Application For Correction Of Tentative Assessed Valuation that is filed on behalf of a property which was required to file a form RPIE-2016 and which failed to do so.

In addition, the Department of Finance will use the income and expenses from comparable properties (in their opinion, comparable) to set the tentative assessment valuation for tax year 2018/2019 and this assessment may be many multiples of your current assessed valuation.

Please read the Real Property Income And Expense Instructions before you complete form RPIE-2016 as the penalties for failure to file or failure to file properly are severe and are now being more forcefully enforced by the Department of Finance. This includes the imposition of monetary penalties.

RPIE AUDITS

As I noted in previous Newsletters, the Department of Finance has begun a program of auditing RPIE filings and erroneous or fraudulent filings may be penalized in accordance to law.

In addition you should be reminded that the Tax Commission has been forwarding cases of fraudulent filings to the District Attorneys which have resulted in criminal prosecutions.