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Perspectives

Buildings Must Now Pay “Prevailing Wages” to Staff in Order to Qualify for Real Property Tax Abatements

Effective April 1, 2022, most cooperatives and condominiums in New York City will be required to pay their service employees the “prevailing wages” and benefits for their jobs, as determined by the City Controller, in order to retain their eligibility for property tax abatements under Real Property Law § 467-a.  Buildings whose staff are members of a labor union, such as Local 32BJ, will generally not be affected by this change, because the union contracts already provide for wages and benefits in excess of the minimums.  Buildings whose units have an average assessed value of less than $60,000, or less than $100,000 if the building contains fewer than 30 units, are excluded.  All other cooperatives and condominiums that enjoy tax abatements should check with their professionals as to whether their salary schedules and benefit policies comply with the minimums or whether they need to increase any of the employees’ wages or benefits in order to preserve their tax abatements.