From landmark legislation, to important regulatory guidance to instructive case law, 2013 saw many significant New York developments, lessons and reminders.

1. Last minute reprieve prevents loss of tax abatement for apartments held in trust. Since 1996, New York City has offered a partial property tax abatement program for cooperative apartment and condominium owners. The abatement is designed to eliminate the disparity in real property tax, which is assessed at a much higher value against those unit holders than against holders of family homes. Under the abatement renewal enacted in January 2013, the abatement would have been lost if a cooperative or condominium unit were held by a trust or in a limited liability company (LLC). Although it was designed to limit the abatement’s benefit to primary residence holders, the new law penalized those primary residence holders who transferred their units to trusts or LLCs as part of their estate planning or for privacy reasons. Under a new law enacted on July 3, 2013,1 the abatement will not be lost if a unit is held in trust for a person otherwise eligible for the abatement. Among other comments made in its support of the proposal, the New York City Bar has recommended that the abatement be expanded to include single member LLC and legal life estate forms of ownership, as well as trusts.

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