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As City Looks for Cash, Co-ops Might Be Next for Mortgage Tax

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Much like a deserted island castaway desperate for food, New York City is getting antsy for cash. And where's the money hiding? Co-ops! Which means, co-op owners, that your precious they're-not-apartments-they're-building-shares soon might not be so special. The Observer reports that Governor David Paterson is pulling off the shelf a twenty-year-old proposal to extend the mortgage recording tax to co-ops. (Currently, only condos and houses get hit, to the tune of 2.05 to 2.175 percent of their mortgages.) The revenues for the city could be up to $50 million per year. But then there are the negatives: the tax, as it's currently proposed, would apply to refinancing and new mortgages, so it could hit owners even if they aren't planning to sell. And there's the possible downside for the co-op market, where sales prices are already down about 16 percent from early '08. But hey, that's what happens when there are rumblings about condo/co-op tax inequality.
· The Bell Tolls for Co-Ops [NYO]
· Property Tax coverage [Curbed]