Extends the tax rate reduction under the NY state real estate transfer tax and the NYC real property transfer tax for conveyances of real property to existing real estate investment funds.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9394
SPONSOR: Farrell TITLE OF BILL: An act to amend the tax law and the administrative
code of the city of New York, in relation to extending the tax rate
reduction under the New York state real estate transfer tax and the New
York city real property transfer tax for conveyances of real property to
existing real estate investment funds
PURPOSE OR GENERAL IDEA OF BILL: To extend the tax rate reduction
under the state and New York City real estate transfer tax for convey-
ances for real property to existing real estate investment trusts
(REITs).
SUMMARY OF SPECIFIC PROVISIONS: The bill extends the tax rate
reduction under the State and New York City real estate transfer tax for
conveyances of real property to existing real estate investment trusts
until September 1, 2017. Currently, both the New York State and New York
City real estate transfer taxes to REITs are set to expire on September
1, 2014.
JUSTIFICATION: The implementation of the REIT tax credit in 1996
contributed to robust sales activity with REITs along with a surge in
transfer tax revenue. The REIT credit was extended again in 1999, 2002,
2005, 2008, and 2011.
PRIOR LEGISLATIVE HISTORY:
Chapter 416 of 2008
Chapter 493 of 2011
FISCAL IMPLICATIONS: Increase in transfer tax revenue for the State
and the City of New York.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK
________________________________________________________________________
9394
IN ASSEMBLY
April 25, 2014
___________
Introduced by M. of A. FARRELL -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law and the administrative code of the city of
New York, in relation to extending the tax rate reduction under the
New York state real estate transfer tax and the New York city real
property transfer tax for conveyances of real property to existing
real estate investment funds
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The opening paragraph of subparagraph (B) of paragraph 2 of
2 subdivision (b) of section 1402 of the tax law, as amended by chapter
3 493 of the laws of 2011, is amended to read as follows:
4 For purposes of this subdivision, the phrase "real estate investment
5 trust transfer" shall mean any conveyance of real property or an inter-
6 est therein to a REIT, or to a partnership or corporation in which a
7 REIT owns a controlling interest immediately following the conveyance,
8 which conveyance (I) occurs in connection with the initial formation of
9 the REIT, provided that the conditions set forth in clauses (i) and (ii)
10 of this subparagraph are satisfied, or (II) in the case of any real
11 estate investment trust transfer occurring on or after July thirteenth,
12 nineteen hundred ninety-six and before September first, two thousand
13 [fourteen] seventeen, is described in the last sentence of this subpara-
14 graph.
15 § 2. Subparagraph 2 of paragraph (xi) of subdivision (b) of section
16 1201 of the tax law, as amended by chapter 493 of the laws of 2011, is
17 amended to read as follows:
18 (2) any issuance or transfer of an interest in a REIT, or in a part-
19 nership or corporation in which a REIT owns a controlling interest imme-
20 diately following the issuance or transfer, in connection with a trans-
21 action described in subparagraph one of this paragraph. Notwithstanding
22 the foregoing, a transaction described in the preceding sentence shall
23 not constitute a real estate investment trust transfer unless (A) it
24 occurs in connection with the initial formation of the REIT and the
25 conditions described in subparagraphs three and four of this paragraph
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14842-01-4
A. 9394 2
1 are satisfied, or (B) in the case of any real estate investment trust
2 transfer occurring on or after July thirteenth, nineteen hundred nine-
3 ty-six and before September first, two thousand [fourteen] seventeen,
4 the transaction is described in subparagraph five of this paragraph in
5 which case the provisions of such subparagraph shall apply.
6 § 3. Subparagraph (B) of paragraph 2 of subdivision e of section
7 11-2102 of the administrative code of the city of New York, as amended
8 by chapter 493 of the laws of 2011, is amended to read as follows:
9 (B) any issuance or transfer of an interest in a REIT, or in a part-
10 nership or corporation in which a REIT owns a controlling interest imme-
11 diately following the issuance or transfer in connection with a trans-
12 action described in subparagraph (A) of this paragraph. Notwithstanding
13 the foregoing, a transaction described in the preceding sentence shall
14 not constitute a real estate investment trust transfer unless (i) it
15 occurs in connection with the initial formation of the REIT and the
16 conditions described in subparagraphs (C) and (D) of this paragraph are
17 satisfied, or (ii) in the case of any real estate investment trust
18 transfer occurring on or after July thirteenth, nineteen hundred nine-
19 ty-six and before September first, two thousand [fourteen] seventeen,
20 the transaction is described in subparagraph (E) of this paragraph in
21 which case the provision of such subparagraph shall apply.
22 § 4. This act shall take effect immediately.
