NYC Wants Tax Relief for Tenants Who Sign Leases

March 5, 2009
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The Real Estate Board of New York (REBNY) is lobbying the city to grant tax relief to commercial tenants who sign leases. REBNY claims that the tax relief will help save jobs during the recession.

The group pitched the idea to Mayor Michael Bloomberg two weeks ago but didn’t specify what type of relief they’d like the city to offer. Instead, they pushed the idea of lowering the burden on companies that sign leases that extend five years or more and pledged to create construction jobs by spending money improving the space.

The president of REBNY says that the lower taxes would help tenants who might have been considering moving or setting up business in another location. He says that he believes that the program won’t cost any money and will actually maintain the city’s tax base by keeping companies in New York.

The idea is modeled on an incentive plan for the downtown area that started in the 1990s. Under that plan, commercial rent tax for tenants in the area was eliminated and the real estate tax was lowered by $2.50 per square foot. The current commercial rent tax is 3.9 percent and real estate taxes average $12.50 per square foot.

So far, the city has not indicated that it plans to make any changes.

Source: crainsnewyork.com