Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Public Policy newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (July 8, 2020, 8:17 PM EDT) -- New York City's mayor has signed into law measures temporarily eliminating late tax payment interest on homes assessed at less than $250,000, and cutting interest rates for certain rental and commercial property owners from 18% to 7.5%.
Democratic Mayor Bill de Blasio signed the two measures into law on Tuesday. The measures aim to bring relief to home and commercial property taxpayers despite steep revenue declines caused by the novel coronavirus, which causes the respiratory illness COVID-19. The city council passed the bills last month despite some council members' arguments that the city still could do more to help those who have taken economic hits from the pandemic.
De Blasio signed Measure 1964-A, sponsored by Democratic Council Member Margaret Chin, which passed the council last month by a 45-2 vote. The bill reduces an 18% interest rate on nonpayment of taxes to 7.5% for certain rent-regulated rental and commercial properties for fiscal year 2021 property taxes. The rate is reduced from July 1, 2020, to Oct. 15, 2020, for certain property owners.
The reduced rates apply to owners of certain Class 4 properties with assessed values of $250,000 to $750,000 and who have had a 50% decline in income between March 7 and June 30 compared with last year. Class 4 properties include commercial and industrial properties such as office, retail and factory buildings. The reduced rates also apply to properties with an assessed value of more than $250,000 and have 30 residential units or less of which 50% or more are rent-regulated and have had a 25% income decline in the same period.
Chin's measure underwent several changes since it was first introduced, including the removal of a provision that would have required property owners to provide to commercial, residential or institutional tenants or lessees a temporary suspension of rent and a low-interest rate on late rent.
The changes went into effect immediately and are retroactive to June 25. The city Department of Finance would be required to report how many properties took advantage of the 7.5% rate by Nov. 1.
De Blasio also signed Measure 1974-A, sponsored by the city Public Advocate Jumaane Williams. The measure sets a 0% interest rate from July 15 through Sept. 30 for certain homeowners affected by the pandemic who can't pay their July 1 property tax bill on time. Those who are eligible are owners of properties with an assessed value of $250,000 or less that are primary residences, and the owners have an income of less than $150,000 or have a hardship installment agreement with the city. The measure applies to certain condominium properties and certain Class 1 properties owners who use the property as their primary residence. Class 1 properties are generally one- to three-family residential real properties.
The law took effect immediately and is retroactive to June 25.
De Blasio's office didn't immediately respond to requests for comment. Chin's office didn't immediately respond to requests for comment.
Council Speaker Corey Johnson's office didn't immediately respond to requests for comment. Williams' office deferred to comments the public advocate made in June, when he said that the measure provides urgent property tax relief to alleviate the financial devastation caused by the pandemic.
Democratic Council Member Kalman Yeger told Law360 on Wednesday that while he voted to support the measures, he thought the city could do more to provide relief. He introduced a failed amendment to Chin's measure that would have cut the interest rate on nonpayment of taxes to zero for certain rent-regulated rental and commercial properties.
"These are good measures, except they're not the greatest they can be and I think we could do better," Yeger said. "But ultimately if that's what was going to come to the floor, I was going to vote in favor of it, and I did."
The passage of the tax relief bills comes soon after the council approved a $88.19 billion budget for the fiscal year that began July 1 amid a $9 billion revenue shortfall that council members said was caused by the COVID-19 pandemic.
--Editing by Joyce Laskowski.
For a reprint of this article, please contact reprints@law360.com.
