The CRT is imposed on tenants who rent property for commercial activity in Manhattan, and:
- it is located in the borough of Manhattan, south of the center line of 96th Street;
- the annual or annualized gross rent paid is at least $250,000; and you do not meet any other exemption criteria, such as short rental periods, residential subtenants, use for theatrical productions, and not-for-profit status.
Note: Tenants with annual taxable rents between $250,000 and $300,000 are eligible for a sliding-scale credit that partially offsets the tax.
A "tenant" is someone who pays rent as a lessee, sub-lessee, licensee, or concessionaire. Tenant-shareholders in co-ops are included. Taxpayers must also pay the CRT if they:
- Occupy space in buildings owned by spouses or parents;
- Occupy space in buildings jointly owned with another person who is not the Taxpayer’s spouse or domestic partner;
- Occupy space in buildings owned by corporations where the Taxpayer is an officer or shareholder;
- Are a corporation, occupying space in a building that is owned by a subsidiary corporation or by a parent corporation; and
- Are a corporation, occupying a space in a building owned by an officer or stockholder of the corporation.
The tax rate is 6% of the base rent. All Taxpayers are granted a 35% base rent reduction, which reduces the effective tax rate to 3.9%. In addition, Taxpayers are allowed a tax credit if the annualized base rent before the 35% rent reduction is between $250,000 and $300,000.