State legislation that would allow municipalities to tax condominiums at market rates is gaining support among Warren County Supervisors.
Under New York’s existing property tax law, condominium owners’ tax bills are based on the unit’s current or potential rental income, not its market value, Queensbury assessor Teri Ross told the Supervisors’ Real Property Tax Services Committee on April 28.
“New York State now mandates the formula we use to assess condominiums; it prohibits us from assessing them as we do all other real property, at market value,” said Ross. “We are required to assess them as if they were individual units in an apartment building, determining what they would rent for, rather than what they would sell for.”
It is estimated that under current law, condo owners’ county, town and school tax bills are 30 to 50% less than what they ought to be.
“That means they’re paying that much less than what everybody else is; that is just not fair,” said Ross.
Hochul Vetoed Same Legislation in 2022
Under the proposed legislation, upstate communities would be allowed to tax a new condominium on the basis of its market value – just as they do any comparable primary residence or vacation home.
The legislation would apply only to new construction, and it would not require localities to tax condos at market rates – it would merely give them that option.
Assessors have been advocating for this particular change in the law since the 1980s, Ross told the Supervisors.
“The bills never passed; they were voted down every year,” she said.
In 2022, however, both houses of the legislature passed the bill. But on December 31, Governor Kathy Hochul vetoed the bill.
$1 Million Condos: Affordable Housing?
According to municipal government associations, the legislation limiting assessments on condominiums was adopted in 1964 at a time when the purchase of a condo was viewed as a path to home ownership for low-income renters.
Hochul continues to view condos through that lens, arguing that many people shopping for a first home seek out condos. She said higher taxes would make that type of housing less attractive to low-income homebuyers.
“At a time when New York state is in the midst of a statewide housing crisis, this would be an unacceptable outcome,” Hochul wrote in her veto message.
“How can Governor Hochul see condominiums as affordable housing?” asked Queensbury Supervisor-at-large Brad MacGowan, noting that condominiums sell for one and two million dollars.
“We can’t have folks that can afford very expensive condominiums carrying less of their share of the load than the guy who owns a modest home,” said MacGowan.
“This legislation would allow counties, municipalities and school districts the right to opt out of the current state law, and I think that’s smart, because one size does not fit all,” said Bolton Supervisor Ron Conover.
Several condominium projects are planned or are under construction in Lake George and Bolton Landing, and the revenues that local governments and school districts will lose as a result of Governor Hochul’s veto are not insignificant.
As of now, condominiums in Bolton Landing cost the town $150,515 per year in taxes; Warren County $8,196 and the school district $198,081.
In Lake George, the town, county and school district collect $25,437, $80,290 and $126,044 less, respectively, than what they would if condos were assessed at market rates.
At present, there are only two small condominium projects in Queensbury, which cost the Queensbury Union Free School District $51,000 per year, said Ross.
More may be on their way, though, to towns throughout Warren County, said Ross.
Assessors Seek Supervisors’ Support
Ross and the other assessors who accompanied her to the Supervisors’ Real Property Services Committee –Lori Barber of Lake George, Deanne Rehm, until recently assessor for Lake Luzerne and Christine Hayes, who serves Bolton and Horicon and is the New York State Assessors Association’s current president – have requested the Board of Supervisors to adopt a resolution calling upon Governor Hochul to sign the legislation that she vetoed last year.
The county’s constituent towns will be asked to adopt similar resolutions, the assessors stated.
While the proposed legislation would apply only to new construction, Deanne Rehm, Bolton’s Supervisor for six years and a former member of the Adirondack Park Agency, said she favored taxing existing condominiums at market value.
Home Rule Request to Opt Out of Current Law
Should Hochul veto the bill again in 2023, the assessors hope she will grant Warren County a home rule request to allow the county and its constituent towns to tax new condominiums at the same rate as single family homes.
Last December, Hochul granted the Westchester County Town of Greenburgh, which is comprised of wealthy villages such as Irvington, Hastings and Dobbs Ferry, a similar request, permitting it to value newly constructed condominiums at market value.
The legislation was sponsored by Senate Majority Leader Andrea Stewart-Cousins, who represents the portion of Westchester that includes Greenburgh.
“We figure if Greenburgh deserves that consideration, so, too, does Warren County and its towns,” said Ross.
On April 18, according to “The Rivertowns Enterprise,” the Greenburgh Town Board approved legislation allowing future condominiums to be taxed at market rates.
According to the newspaper, opponents argued the new local law would deter developers from constructing new housing within the town.
On Greenburgh’s website, town officials stated developers who wish to build affordable condos and co-ops could apply for tax abatements.
Warren County Attorney Larry Elmen said he would draft the home rule request, which Assemblyman Matt Simpson and Senator Dan Stec have agreed to introduce.