How the calculation works
421-a and J-51 do not lower your tax rate. They exempt part of the assessed value, usually the value added by new construction or renovation. Each benefit year has a set exemption percentage. When the percentage drops, more of the assessed value becomes taxable and the bill goes up. The tool works out the value the benefit covers from this year's exempt amount (exempt assessed value ÷ this year's percentage). Then, for each future fiscal year, it computes:
tax = (full assessed value − covered value × that year's exemption %) × tax rate × your share
For J-51 buildings, any remaining yearly abatement is subtracted until its last year.
| Benefit | Full exemption | Then |
|---|---|---|
| 421-a 10-year | Years 1–2 | 80% (yrs 3–4), 60% (5–6), 40% (7–8), 20% (9–10) |
| 421-a 15-year | Years 1–11 | 80%, 60%, 40%, 20% (yrs 12–15) |
| 421-a 20-year | Years 1–12 | 80% (13–14), 60% (15–16), 40% (17–18), 20% (19–20) |
| 421-a 25-year | Years 1–21 | 80%, 60%, 40%, 20% (yrs 22–25) |
| 421-a(16) 35-year rental | Years 1–25 | Affordable-unit % (yrs 26–35) |
| 421-a(16) enhanced | Years 1–35 | Fully taxable year 36 |
| 421-a(16) homeownership | Years 1–14 | 25% (yrs 15–20), on AV up to $65,000 per unit |
| 421-a(17) extension (pre-2008 rentals) | None | 50% for 10 more years (after a 25-year benefit) or 15 more (after a 20-year) |
| J-51 14-year | Years 1–10 | 80%, 60%, 40%, 20% (yrs 11–14) |
| J-51 34-year | Years 1–30 | 80%, 60%, 40%, 20% (yrs 31–34) |
Benefit years run with the city's fiscal year, July 1 to June 30. Any construction-period exemption (up to three years) comes before benefit year 1.
Worked example
A Long Island City condo unit has a 15-year 421-a benefit that started in FY2016. FY2027 (July 2026 to June 2027) is benefit year 12, so the unit is 80% exempt. Its notice of property value shows a full assessed value of $60,000 and an exempt value of $48,000, so the benefit covers $60,000. At the class 2 rate of 12.439%:
- FY2027 (80%): ($60,000 − $48,000) × 12.439% = about $1,493
- FY2028 (60%): $24,000 taxable, about $2,985
- FY2029 (40%): $36,000 taxable, about $4,478
- FY2030 (20%): $48,000 taxable, about $5,971
- FY2031 (fully taxable): $60,000, about $7,463
The benefit ends June 30, 2030. Taxes rise about $5,970 a year, roughly $500 a month, before any change in assessed value or tax rate.
What happens to rent stabilization
HPD's tenant fact sheet sets out the general rules. They can vary by building:
- Market-rate units, construction started before 2016: can be deregulated at the first renewal after the benefit ends only if every lease and renewal carried a notice in at least 12-point type saying so, with the approximate expiration date.
- Income-restricted units, construction started July 2008 to 2015: stay affordable and stabilized at least 35 years from completion. A tenant living there at that point keeps stabilization for as long as they live there.
- 421-a(16) units: income-restricted units are stabilized 35 years (40 for some large buildings). Market-rate units are stabilized only if their rent is below the vacancy decontrol threshold.
- J-51: rental units are stabilized or rent controlled for the duration of the benefits.
Edge cases
- The tool assumes today's tax rate. Assessed values for class 2 properties can also change, so use the growth input to test scenarios.
- Co-op benefits apply to the whole building lot. Enter your share of the shares to see your part of the increase in maintenance.
- If DOF shows a different end date, trust DOF. Benefits can be revoked, suspended or extended.
- For a 421-a(17) extension, enter the first year of the extension as benefit year 1.
- HPD says the J-51 program expired for work completed after June 29, 2022, so no new J-51 benefits start under the old rules.
What to do next
Check DOF's property benefit records for your building; the building's 421-a certificate of eligibility lists the construction start date. Read what happens when 421-a expires and 421-a and rent stabilization. Renters can test their status with the rent-stabilized checker. Owners can project the full bill with the NYC property tax estimator.