Do Individual Condo Owners Need to Submit the RPIE Form?

Many a New Yorker renting out their property for the first time will get panicked when they notice on their property tax bill that “you must file a Real Property Income and Expense (RPIE) statement or a claim of exclusion unless you are exempt by law.”

After endless searching on the internet, and perhaps a call or two to the NYC Department of Finance, the lucky ones will get to the bottom of the mystery of whether individual condo or co-op apartment owners who rent out their units need to file a RPIE form.

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What is the RPIE form?

The RPIE form is essentially a rent roll report submitted by rental property owners to the NYC Department of Finance annually to help the city’s tax assessors determine the market value of properties.

There are numerous exclusions and exemptions, but generally speaking, you should submit the form even if it’s simply to confirm in the form why you’re exempt or excluded from having to fill out the complete form.

The last page of every NYC property tax bill will say the following, much to the distress of first-time condo unit owners renting out their property:

If you own income-producing property, you must file a Real Property Income and Expense (RPIE) statement or a claim of exclusion unless you are exempt by law. You must also file information about any ground or second floor storefront units on the premises, even if you are exempt from filing an RPIE statement. RPIE filers whose properties have an actual assessed value of $750,000 or greater will be required to file rent roll information. The deadline to file is June 1, 2021. Failure to file will result in penalties and interest, which will become a lien on your property if they go unpaid. Visit www.nyc.gov/rpie for more information.

Who's excluded from having to file a complete RPIE form?

Per the RPIE form that taxpayers are asked to complete online, you can select one of the following exclusions to excuse yourself from having to complete the rest of the RPIE form:

SECTION D – RPIE EXCLUSIONS
TO BE COMPLETED ONLY IF YOU ARE NOT REQUIRED TO FILE AN RPIE

1. I am not required to file an RPIE for this year because my property:
a. has an actual assessed value of $40,000 or less.
b. is exclusively residential with 10 or fewer apartments.
c. is primarily residential with 6 or fewer apartments and no more than one commercial unit.
d. is a residential cooperative apartment building with less than 2,500 square feet of commercialspace (not including garage space).
e. is a residential unit that was sold and is not owned by the sponsor
f. is rented exclusively to a related person or entity.
g. is occupied exclusively by the owner but is not a department store with 10,000 or more grosssquare feet; hotel or motel; parking garage or lot; power plant; or theater.
h. is owned and used exclusively by a fully exempt not-for-profit organization or government entity and generates no rental income.
i. is vacant or uninhabitable and non-income-producing for the entire year.
j. is vacant, non-income-producing land.
k. The owner has not operated the property and is without knowledge of the income and expenses for the entire calendar or fiscal year of the reporting period.

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So are individual condo unit owners exempt from the RPIE form?

Part E in the above RPIE form exclusions appears to exempt individual condo owners from having to fill out the rest of the RPIE form with this option for exclusion:“e. is a residential unit that was sold and is not owned by the sponsor.”

However, there is a maddening degree of ambiguity here which we were only able to clear up after finding a RPIE worksheet from 2015 which expounded upon each of the exclusions mentioned.

The NYC Department of Finance clarified that exclusions include:

Individual residential units in a condominium building/development. For a residential condominium that has commercial space, professional space, and/or has 10% or more unsold sponsor-owned units, an RPIE must be filed for the commercial space, professional space or the unsold sponsor-owned units. An RPIE must also be filed for residential units that are rentals and not intended to be individually owned.

This paragraph clears it up for us in our opinion. Individual residential units in a condo building are exempt. Condo units that are retained by the sponsor and commercial spaces within the condo building must have a RPIE form filed, however that wouldn’t be the responsibility of an individual, residential condo unit owner.

Regarding the last sentence, we believe that refers to condo units that have been retained by the sponsor with the intention to keep them as rentals, and thus does not apply once again to individual condo unit owners that have rented out their home.

Pro Tip: We have since emailed rpie@finance.nyc.gov at the NYC Department of Finance asking for clarification and confirmation of the above. We have not heard back yet, but will endeavor to update this article if and when we do hear back.

Are individual coop apartment owners exempt from the RPIE form?

Most coops appear to be excluded per Part D of the RPIE form because the home “is a residential cooperative apartment building with less than 2,500 square feet of commercial space (not including garage space).”

This was further clarified by the above referenced worksheet we found which expounded upon the exclusion for co-ops:

Residential cooperative apartment buildings with no more than 2,500 square feet of commercial space (not including garage space). To claim this exclusion you must still complete the RPIE-2015 (Parts I and IV). An RPIE is required for unsold sponsor-owned units if 10% or more of the units remain unsold.

In our opinion, individual co-op apartment unit owners do not need to worry about this form. If your co-op has a lot of commercial space or is otherwise required to file, your building management company or co-op board will be responsible for handling, not you.

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Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Hauseit LLC is a Licensed Real Estate Broker, licensed to do business in New York under license number 10991232340. Principal Office: 148 Lafayette Street, New York, NY 10013.

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