The 421a Exemption Program offers benefits to developers and future and current property owners to promote multi-family residential construction. It provides a declining exemption on the new value that is created by the improvements.
The property must have at least three dwelling units.
421a benefits vary based on:
The program is administered by the NYC Department of Housing Preservation and Development (HPD). HPD determines your eligibility for this program, and the Department of Finance (DOF) implements the benefits once HPD approves your application.
Once approved, HPD will send you a Certificate of Eligibility. You must complete and submit DOF’s 421a application and include the original Certificate of Eligibility with raised seal.
Note that if you participate in the 421a program for your primary residence, you aren't eligible for other personal property exemptions, such as Senior Citizen Homeowners' Exemption (SCHE), Disabled Homeowners' Exemption, and the Veterans Exemption, until your 421a exemption expires.
The Department of Housing Preservation and Development's (HPD) Division of Alternative Management operates several programs that select alternative managers for residential properties foreclosed on by the City for nonpayment of taxes, with the goal of returning these properties to the tax rolls.
The J-51 Program encourages the renovation of residential properties by granting partial tax exemption and abatement benefits. Benefits vary depending on the location of the property and the extent and nature of the improvements.
The program is administered by the NYC Department of Housing Preservation and Development (HPD). HPD determines your eligibility for this program, and the Department of Finance (DOF) implements the benefits once HPD approves your application.
Once approved, you will receive a Certificate of Eligibility from HPD along with the property tax abatement application which you can then return to DOF.
The program has been extended.
The Major Capital Improvement (MCI) Abatement provides a benefit to owners of Class 2 rent regulated property who have made an MCI to their property after June 15, 2015.
Once the New York State Division of Housing and Community Renewal (DHCR) grants the abatement to a property, the NYC Department of Finance (DOF) will credit the abatement amount on the owner’s property tax bills. The credit will be applied in the tax year beginning after the application is approved, starting in the 2016/2017 tax year. There is no application deadline.
This abatement is only for one year and cannot be renewed. It will not affect, reduce or offset any other tax benefit granted, calculated or approved for the property by the City or State.
The Solar Electric Generating System (SEGS) Tax Abatement provides a property tax benefit for properties with solar electric systems such as solar panels.
The abatement is administered by the Department of Buildings (DOB). DOB determines your eligibility for this program, and the Department of Finance (DOF) implements the benefits once DOB approves your application.
The Urban Development Action Area Project (UDAAP) exemption is granted to property developed on formerly City-owned land in designated Urban Development Action Area Projects.
The program encourages the construction of residential housing in these designated areas, in conformance with land-use standards and the law.
The City Council must pass a resolution designating the project as a UDAAP and authorizing the exemption. The Department of Housing Preservation and Development (HPD) usually requests the resolution.
Tax Incentive Programs (TIP) then issues a Certificate of Eligibility and the Department of Finance (DOF) implements the benefits.
The following programs are closed to new applicants and expired.
421b Program
The Section 421b Program was administered by the Department of Housing Preservation and Development (HPD) to promote new one- and two-family housing construction by making home ownership more affordable.
This exemption provided a declining benefit on the construction, reconstruction, or conversion of one- and two-family homes. There were no geographic restrictions. HPD determined eligibility for this program, and the Department of Finance (DOF) implemented the benefits once HPD approved an application.
Applications for this program are no longer being accepted. The active program expired on June 30, 2009. For a project to have been eligible for this benefit, construction must have started on or before July 1, 2006. For private dwellings that began on or after July 1, 2002, construction must have been completed no later than July 1, 2009.
