This is not intended to be legal advice; these are simply some layman’s suggestions.
If you own a cooperative unit and are trying to complete the rate of return worksheet for rent control, you may get stuck with the property taxes and assessed value.
When you own a coop unit, you own shares in the cooperative corporation that owns the building, you do not own the unit you occupy. Those shares grant you the use of a specific unit. In fact, you do not own any real estate. So you might think this doesn’t apply to you, but it does.
Although more complex for co-op owners than traditional condominium unit owners, you can still quickly complete the rate of return with some background work. Below are two methods to determine this information.
First, the number of shares you own in the corporation is generally allocated based on square footage and various other factors. The number of shares you possess correlates to a percentage of stock (ownership) in the Corporation. The total number of shares issued to all owners (shareholders) equals 100%.
For example, if a building has ten units with equal shares, your percentage of stock owned, or your ownership, is 10%.
Second, the co-op corporation receives a property tax bill based on the assessed value of the building from the D.C. Office of Tax and Revenue. As part of your co-op fees, you pay a percentage of the property taxes based on the number of shares you own (percentage of stock ownership).
Using our example of ten units with equal shares, if the total building property tax bill were $50,000, the tax bill for each unit would be $5,000.
Third, the building’s property tax bill also provides the annual assessed value of the whole building. You can apply your own percentage of stock ownership to the total assessed value to determine your unit's assessed value.
Using our example of ten units, with each having a 10% share of the building, if the assessed value of the building is $1,000,000, then each unit's assessed value would be $100,000.
METHOD 1: Contact Your Building Manager or Coop Board
- Ask what your share of the property taxes due on your unit. (Line 15 on the Rate of Return worksheet)
- Ask what percentage the Board and Manager used to calculate your share of the property taxes. This percentage would be your percentage of stock ownership.
- Ask what the assessed value of the building is on the property tax bill.
- Now, apply the percentage of ownership (2) to the assessed value of the building (3), and you have the assessed value for your unit. (Line 19 on the Rate of Return worksheet)
METHOD 2: Alternative Method For Self-Managed Buildings
If you are a smaller building that does not have a property management company, you may need to refer to your cooperative documents. Within those documents, it should detail your percentage of ownership.
Once you have found the percentage, you can go to the D.C. Office of Tax and Revenue’s website to find the assessed value and property taxes for the building (Click here). Click “Search Real Property Assessments. Now, search using your building's address. The search should then show the property's SSL, Address, Owner’s Name, and the Assessed Value. Now click the numbers under SSL to go to the property detail, and then on the next screen, click the “Assessed Value” tab to find the property tax information. Once you have found the assessed value and the property taxes, you can apply your percentage to those figures to determine your unit’s share of each.
Since D.C. bills in half-year increments, make sure that when you look at the property taxes, you are using the whole year’s taxes and not half-year. You may need to add the first and second half together to determine the entire current year’s property taxes for the building before calculating your percentage.
Consult your own attorney if you are unclear or need further information. We will not be handling telephone inquiries on this issue.