421-a Tax Abatements: What Happens When They Expire

When a 421-a exemption expires, the property tax on a newer NYC condo or rental building climbs in steps, usually every year or two, until the owner pays full tax. On the most common 10-, 15-, 20- and 25-year schedules the exemption falls by 20 percentage points per step, so a tax bill that was a few hundred dollars can grow several times over in the last years of the benefit.

If you are buying in a building with 421-a, the question isn't whether taxes will rise, but when and by how much. This guide shows the official phase-out schedules, a worked example, how to look up a building's benefit and end date, and what it means for resale.

How 421-a works, briefly

421-a is a partial property tax exemption for new residential construction, substantial rehabilitation and certain conversions. According to HPD, it covers the increase in real estate taxes resulting from the work, not the tax on what was there before. So even in year one, owners usually pay some tax: the tax on the pre-construction value of the lot.

The program came in two main versions:

• 421-a(1-15), the original program: construction had to start by December 31, 2015. Benefits ran 10, 15, 20 or 25 years after construction, depending on location, start date and affordability.
• 421-a(16), "Affordable New York": construction had to start between January 1, 2016 and June 15, 2022, and finish by June 15, 2026. Projects that filed a letter of intent by September 12, 2024 under certain options have until June 15, 2031.

Because the original program's benefits ran 10 to 25 years, many buildings completed in the 2000s and 2010s are now in or near their phase-out years.

The official phase-out schedules

DOF publishes the exemption percentage for each benefit year. The higher the percentage, the less of the new value is taxed. These are the 421-a(1-15) post-construction schedules:

The "capped" 10- and 15-year versions (codes 5117 and 5118) follow the same percentages. For 421-a(16), the schedules look different:

The homeownership schedule (HPD's Option D) applies only outside Manhattan, to projects of 35 units or fewer, with an average assessed value cap of $65,000 per unit, and buyers must agree to live in the unit for at least the first five years. Its drop from 100% to 25% in year 15 is a single large step, not a gradual one.

Worked example: a 20-year condo

Take a condo whose full annual tax, with no exemption, would be $12,000. Assume $600 of that is the tax on the pre-construction value (always taxable) and $11,400 is the exempt new-construction portion. These are illustrative numbers, held constant; in reality assessments and tax rates change each year, usually upward.

Each step adds $2,280 a year ($190 a month). Over eight years the owner's monthly tax goes from $50 to $1,000. A buyer who purchases in year 11 and only looks at the current bill will badly underestimate carrying costs. Run your own numbers with the 421-a and J-51 expiry calculator.

How to check a building's 421-a and its end date

1. 1

   Find the borough, block and lot

   Search the address on Roofy's building lookup to get the BBL and building facts. Condo units each have their own lot number; the offering plan or a recent tax bill shows it.
2. 2

   Look it up on the DOF property portal

   HPD says the DOF property portal shows the benefit start and end dates, the current benefit year and the benefit amount for a property or apartment.
3. 3

   Cross-check DOF’s exempt property lists

   DOF’s 421-a page has borough reports of exempt properties (by BBL, neighborhood, building class and address) for each fiscal year through 2026/27, plus a historical CSV.
4. 4

   Match the schedule

   Find the benefit length and current year, then read the phase-out from the tables above to see the next step-up.
5. 5

   Ask for documents

   In a purchase, ask your attorney to confirm the benefit in the offering plan and the building’s tax projections. For HPD compliance questions: [email protected] or (212) 863-8540.

What expiring 421-a means for resale

• Buyers price in the step-ups. Lenders and co-op/condo buyers look at total monthly cost. A unit in its last phase-out years carries a visibly higher tax, and the remaining low-tax years shrink with every sale.
• List the schedule honestly. Advertising "low taxes" without the end date invites a price renegotiation once the buyer's attorney finds the schedule.
• The co-op/condo abatement may pick up some slack. Buildings receiving 421-a can't get the co-op/condo abatement, except when the 421-a benefit expires on June 30 of the tax year being applied for. Once 421-a ends, owner-occupied units may qualify for a 17.5%–28.1% abatement if the board files.
• Owner-occupants can add personal exemptions. Check STAR, SCHE, DHE and veterans exemptions in the property tax breaks finder.

Where 485-x fits

421-a closed to new construction starts after June 15, 2022. Its successor, RPTL §485-x ("Affordable Neighborhoods for New Yorkers"), was adopted by New York State on April 20, 2024, with HPD rules adopted December 16, 2024. It covers projects of six or more units that start construction after June 15, 2022 and on or before June 15, 2034, and finish by June 15, 2038. Rental options run 10 to 40 years; a homeownership option (outside Manhattan, with a five-year owner-occupancy commitment) runs 20 years. Most options also get up to three years of construction-period benefit; very large Option A projects in Zone A can get up to five. If you're buying in a building that started construction after mid-2022, ask whether it has 485-x rather than 421-a, and get its schedule the same way.

This guide is general information, not legal or tax advice. For a specific property, confirm the benefit with DOF (311 or its 421-a contact page) and your attorney. Related reading: buying a new development condo and J-51 tax benefits.