New York, NY – May 19, 2009 – (RealEstateRama) — New York City Comptroller William C. Thompson, Jr. tomorrow will recommend a reduction in interest rate charges for the non-payment of real estate taxes and the non-payment of water and sewer rents at the Banking Commission.
“During the past year, our country has confronted unprecedented economic challenges,” Thompson said. “Just as President Obama has addressed the many facets of the economic crisis with intelligence and compassion, I suggest that we do the same in this instance in order to help struggling New Yorkers.”
In a letter – which can be viewed at www.comptroller.nyc.gov – Thompson urged Mayor Bloomberg to encourage his Banking Commission representatives to support this proposal.
Last year, the City Council imposed interest rates for the non-payment of real estate taxes and water and sewer rents for Class I properties (assessed at or below $250,000) at 9 percent annually. For Class II properties (assessed above $250,000) the rates were 18 percent annually. These percentages were linked to the prime rate as established by the Board of Governors of the Federal Reserve Bank. When these rates were adopted last year, the prime rate was 5.09 percent. Since that time, the prime rate has dropped to 3.25 percent.
In the letter, Thompson strongly suggested that the interest rate be lowered by an amount equal to the drop in the prime rate since last year, or at least 1.75 percent.
Thompson stressed that his proposed reduction is not significant enough to discourage most New Yorkers from making payments on a timely basis and the rate imposed will not add significantly to the financial burden of those who are experiencing financial hardship.
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