Page 6 - New York Cooperator July 2020

6 THE COOPERATOR — JULY 2020 COOPERATOR.COM Cooperator.com From According to a June 8 press release from Th e Real Estate Board of New York (REBNY), tax revenue generated from investment and residential sales in New York City and New York State decreased by 76% from May 2019 to May 2020, and 40% from April 2020 to May 2020. Th is represents a $145 million revenue shortfall for the City and State year over year, and a $31 million decrease from month to month. Since the arrival of the coronavirus pandemic in March, there has been a decline of more than $160 million in tax revenue. According to REBNY President James Whelan, “Th is data confi rms the unprece- dented economic crisis facing our City and State. Our local economy must reopen in a healthy way. We also need our public offi cials to put in place policies that will restart such economic activity rather than deepen the crisis. Promoting more real estate sales and transactions will produce the tax revenue the City and State need to pay for vital govern- ment services from education to infrastructure improvements.” Representing a full 53% of the city’s total annual tax revenue, the real estate industry is second only to personal income taxes when it comes to powering New York City’s econo- my. (Personal income tax made up 21% in the last fi scal year.) According to REBNY, “Th e industry employs hundreds of thousands of New Yorkers from building service workers Real Estate Sales Tax Revenue NYC Leaders Debate Property Continues to Decline in May Investment & Residential Sales Tax Down 76% Compared to Last Year BY THE COOPERATOR STAFF COOPERATOR.COM Tax and Interest Rates Property Owners Worry as July 1 Tax Payments Loom BY DARCEY GERSTEIN According to Patch.com, New York City is facing a $9 billion defi cit in the weeks lead- ing up to its annual deadline to pass a city budget—one that is sure to be compounded by projected shortfalls in property tax income. Property taxes are one of the main budgetary items over which the city has decision-making powers, and real estate taxes represented 53% of the city’s annual tax income last fi scal year. Th e oversized tax burden on property owners in the city is well documented and dis- cussed; less ballyhooed is the interest rate that has been imposed on delinquent payers since 1991. Since that time, unpaid taxes on large properties have garnered an 18% interest, according to a report in Th e Real Deal. But now that the eff ects of an historic global health crisis have wreaked havoc on an already volatile industry, real estate and other leaders are saying it’s time to reexamine how property owners are charged for being late or delinquent on their tax payments. With infl a- tion and interest rates at historic lows—and with landlords, homeowners, and cooperative corporations receiving less and less of their expected rental, maintenance, and assessment income each month that the shut-down wears on—the question of how late fees should be handled is meriting more attention. Size Matters TRD ’s reporting indicates that the New York City Banking Commission has recom- continued on page 7 continued on page 7