Several paragraphs were inadvertently dropped from a story in yesterday's Real Estate section quoting experts as saying a new tax on the sale of co-ops proposed by Mayor Marion Barry could make it difficult for low-income tenants to buy their apartments collectively. The omitted paragraphs follow: Cooperative housing experts argued, however, that co-ops already are at a disadvantage compared with condominiums because banks generally won't finance them. "If the mayor's tax proposal is piled on top of that, one of the offsetting arguments we've used [for selling co-ops] will be gone," said G. V. Brenneman, preident of Brenneman and Associates and first vice president of the Washington Board of Realtors. It could particularly have a "dampening effect" on the ability of lower-income tenants to band together as a cooperative organization and buy their apartments, he said. At the other end of the housing market, the tax also could be a wet blanket at the exclusive Watergate, also a cooperative. Efficiencies there start at about $100,000, and asking prices go as high as $750,000 for a co-op, Brenneman said. "When you put a 2 percent tax on top of $300,000, that's $6,000, and I don't think that's hay to anybody." he added. William M. Karas, executive vice president at Edmund J. Flynn Co., said it could particularly affect potential owners at "low yeild" cooperatives, where shareholders can buy in at a below-market price but when they leave sell their interest back to the co-op organization for no profit.

Mayor Marion Barry has proposed a new tax on M buyers and sellers of cooperative apartments, an idea that real estate experts say could make it more difficult for low-income tenants to buy their apartments collectively.

The mayor also wants more frequent assessments on construction in progress, meaning that homeowners and builders would pay higher property taxes sooner on additions and new construction, both commercial and residential.

District revenue officials say the tax proposals are necessary to close loopholes in current law. They estimate that the two bills, introduced in the City Council at the mayor's request, will bring in about $1.5 million annually.

John A. Wilson, chairman of the council's finance and revenue committee--who plans to oppose Barry in the mayoral election next year--meanwhile said in an interview that he plans to propose property tax breaks for certain kinds of service industries to compete with the suburbs, which have been attracting firms away from the city. The breaks would go to theater and entertainment businesses, national associations and department stores.

He predicted that the incentives would pay for themselves by the increased revenues from the business activity they would generate, and would only have to be in effect for five or six years to encourage new business.

Wilson--who early this year proposed a five-year, $215 million package of tax increases to deal with the city's severe fiscal problems--was critical of the mayor for proposing tax rises now.

Asked his opinion on the co-op and construction tax proposals, Wilson at first said he was not for or against them but later in the same interview decided, "I'm not for increasing a single tax." In any event, the committee is pretty well booked through the end of the year, to consider such proposals as his plan to freeze property tax assessments, Wilson added.

The mayor's co-op proposal would impose a 2 percent transfer tax on cooperative apartment sales, bringing this in line with taxes on sales of other kinds of housing. Currently sales of real property are subject to a one percent transfer tax paid by the seller and a one percent deed recordation tax paid by the buyer. Co-ops were unintentionally excluded because they technically are sold not as "real property" but as shares in a cooperative corporation.

Cooperative housing experts argued, however, that co-ops already are at a disadvantage compared with condominiums because banks generally won't finance them.

"If the mayor's tax proposal is piled on top of that, one of the offsetting arguments we've used for selling co-ops will be gone," said G.V. Brenneman, president of Brenneman and Associates and first vice president of the Washington Board of Realtors.

It could particularly have a "dampening effect" on the ability of lower-income tenants to band together as a cooperative organization and buy their apartments, he said.

At the other end of the housing market, the tax also could be a wet blanket at the exclusive Watergate, also a cooperative. Efficiencies there start at about $100,000, and asking prices go as high as $750,000 for a co-op, Brenneman said. "When you put a 2 percent tax on top of $300,000, that's $6,000, and I don't think that's hay to anybody," he added.

William M. Karas, executive vice president at Edmund J. Flynn Co., said it could particularly affect potential owners at "low-yield" cooperatives, where shareholders can buy in at a below-market price but when they leave sell their interest back to the co-op organization for no profit.

There are 316 cooperative buildings in the District with a total of 8,900 units, according to the D.C. assessors office.

The mayor's second proposal would allow the city to assess new construction, construction in progress and improvements to existing buildings in both halves of the fiscal year. It would apply to newly built houses, a new wing on a house or an added garage even if the property had been assessed earlier in the tax year, a letter of explanation from the mayor to Council Chairman Arrington Dixon said.

John T. O'Neill, executive vice president of the Apartment and Office Building Association, said his group opposes the tax and is "concerned about it."

"This would hit the construction job with a double whammy on property taxes," O'Neill said. "We don't mind being assessed once like everybody else, but they don't assess anybody else twice."

Property taxes should be waived entirely during construction to stimulate new building and development, he said. "We have a lot of fallow land in the District no one is going after," O'Neill added, saying the city is losing the competitive fight to the suburbs because the District has a number of antibusiness policies.

The tax rates are $2.13 per $100 for commercial owners, $1.54 for rental property and $1.22 for owner-occupied homes.

Councilman Wilson has been criticized by some city officials for proposing that residential property assessments be frozen indefinitely. They say it would cost too much in lost revenue and its benefits would be spread unevenly. While property tax rates have been lowered regularly, assessments have more than doubled in the past five years, resulting in higher property tax bills.

O'Neill estimated Wilson's assessment freeze would cost between $10 million and $12 million a year.

Wilson contended, however, that his plan "doesn't lose the city a dime," because the District can always raise property tax rates any time it wants. The freeze would force responsibility on spending, he said.

"I think people ought to stop crying the blues and grow up and become politicians. If you want a library, damn it, vote for it," Wilson said.

The freeze also would apply to commercial property for one year, but Wilson said this is mainly to give the city a chance to reevaluate these assessments, which he said are probably underestimated.

The business incentive plan, which he plans to offer as a bill in about a month, would be designed to attract firms with at least 300 jobs for city residents, Wilson said.

"I think we'll get it done, but not this year because everybody thinks I'm running for something," he added, making it clear that he is, in fact, running for mayor.