Legislation to Clarify Real Property Tax Exemptions for Certain NYC Affordable Housing Projects
Recently, the NY State Legislature enacted, and Governor Cuomo signed into law, an amendment to Section 11-2106 of the Administrative Code of The City of New a new Section 9 to Subdivision (b). Section 11-2106 grants exemptions to various transactions from the imposition and payment of the New York City Real Property Transfer Tax (“RPTT”).
The driving force behind this legislation was the fact the NYC Department of Finance (“DOF'”) was disallowing exemptions for certain projects where there was a Nominee Agreement in place between the Beneficial Owner and the Housing Development Fund Company (“HDFC”) Nominee. The City believed that there was a lack of 5tatutory Authority to permit this exemption under those circumstances.
This positon not only threatened to impact current Affordable Housing Projects that claimed the exemption, but also future Affordable Housing Projects which would partner with HDFC’s. As a result. the newly-enacted legislation grants partial exemptions from RPTT to the conveyance of Real Property (or an economic interest therein) to an HDFC, or to an entity in which a controlling interest is held by an HDFC. The specific requirements for securing a partial exemption are outlined in the attached comment and legislative memorandum.
And while the law became effective on August 19, 2016, it is retroactive and applies to all eligible conveyances dating back to January 1, 2010. Accordingly, any HDFC Affordable Housing transaction that closed subsequent to January 1, 2010 where the RPTT tax exemption was disallowed during the DOF audit process may now have this determination reconsidered by DOF.
The NYC Amnesty Program
September 19, 2016
Pursuant to Local Law 45 (link), the City of New York began an ECB amnesty program on September 12, 2016. The City asserts that they are attempting to collect some of the $1.5 billion it is owed in unpaid Environmental Control Board (“ECB”) fines. The City has advised that they will be actively attempting to collect on ECB via other methods as well.
If you have unresolved ECB violations in judgment, you may be eligible for Forgiving Fines, under the NYC Amnesty Program. During the amnesty program, the City will waive penalties and interest charges on ECB violations that went into judgment before June 12, 2016. Some of these violations may also be eligible to have their base penalty reduced. The amnesty program will be available from September 12, 2016 through December 12, 2016.
Only ECB violations/judgments are eligible for the program. Payment is to be made to the Department of Finance and will take anywhere from 90-120 days to clear the ECB violation/judgments of record.
Click below to a link to Frequently asked Questions and Answers regarding the program: NYC ECB Amnesty Program Q&A
Please contact any member of our staff with questions.