New York Property Owned by Trusts to Continue Receiving Tax Abatements

The practice of buying a home in a trust or LLC has becomepopular in New York as more people wish to keep their privacy.

Since 1996, New York law has given owners of co-ops andcondos a 17.5% tax abatement.  The law ismeant to equalize the tax burden placed on co-ops and condos, which are taxedat a higher rate than single-family homes.

The State legislature caused an uproar when it voted tolimit this benefit to primary residences and clarified properties owned bytrusts or LLCs could not be considered primary residences.

The legislature then amended the law to include bothrevocable and irrevocable trusts, provided the apartment is, in fact, theprimary residence of a designated trustee or beneficiary.  However, LLCs will not receive this treatmentand will be ineligible to receive the tax abatement. 

See Kim Velsey, Trust in Tax Breaks: Co-ops and Condos Heldby Trust Will Get Abatements, LLCs Not So Lucky, The New York Observer,July 29, 2013.