New York has enacted legislation authorizing New York City to adopt a local law providing a real property tax abatement for alterations and improvements to certain Class A multiple dwellings. The legislation also amends the real property tax law in relation to eligible multiple dwellings under the Affordable New York Housing Program. (L. 2026, A10006 (c. 56), effective immediately 05/28/2026.)
NYC Property Tax Abatement
The legislation authorizes a city with a population of one million or more, effectively New York City, to adopt a local law providing a real property tax abatement for eligible buildings in which eligible rehabilitation construction has been completed. The aggregate abatement cannot exceed 100% of the total certified reasonable cost of the eligible construction, as determined under rules and regulations of the local housing agency. The abatement cannot be effective for more than 20 years, and the annual abatement cannot exceed 8.33% of the total certified reasonable cost of the eligible construction.
The annual abatement for an eligible building in any consecutive 12-month period cannot exceed the amount of real property taxes payable for the building during that period. However, the annual abatement cannot exceed 50% of the real property taxes payable during the period for:
- an eligible rental building owned by a limited-profit housing company or redevelopment company;
- an eligible homeownership building; or
- an eligible regulated homeownership building.
For an approved application, an amount equal to the filing fee is included in addition to the aggregate amount abated. The abatement is effective beginning with the first quarterly tax bill immediately following issuance of the certificate of eligibility and reasonable cost.
An eligible rental building, other than one owned and operated by a limited-profit housing company, is subject to additional requirements. Market rental units that are subject to rent regulation as of the application filing date and all qualifying rental units remain subject to rent regulation until the unit first becomes vacant after the expiration of the restriction period.
For eligible rental buildings that do not receive substantial governmental assistance, at least 50% of the dwelling units must be designated as qualifying rental units. The owner also is required to ensure that no qualifying rental unit is held off the market longer than reasonably necessary, waive collection of any major capital improvement rent increase attributable to eligible construction for which benefits are received, and refrain from renting qualifying rental units on a temporary, transient, or short-term basis. During the restriction period, the owner cannot harass tenants, unlawfully evict tenants, or convert dwelling units to cooperative or condominium ownership.
Rehabilitation program benefits are not allowed unless the building complies with all applicable law and the local housing agency determines that the eligible construction was carried out in conformity with applicable law. Benefits are not allowed if there are outstanding real estate taxes, water and sewer charges, or payments in lieu of taxes that are due and owing as of the last day of the tax period preceding receipt of the certificate of eligibility and reasonable cost by the local agency responsible for real property tax assessment. Benefits also are not allowed if real estate taxes or water and sewer charges due during the benefit term remain unpaid for one year after becoming due and payable.
Benefits generally are not allowed for a building concurrently receiving a tax exemption or abatement for rehabilitation or new construction under another state or local law or ordinance, except for eligible construction to a building receiving an exemption or abatement under the Private Housing Finance Law. Benefits also cannot be applied to abate taxes on the land portion of real property.
Rehabilitation program benefits are not allowed for any item of eligible construction in an eligible building if the eligible building is receiving tax exemption or abatement for the same or a similar item of eligible construction as of the December 31 preceding the date of application for a certificate of eligibility and reasonable cost.
Where the eligible construction includes or benefits a portion of an eligible building that is not occupied for dwelling purposes, the assessed valuation of the eligible building and the cost of the eligible construction are apportioned so that rehabilitation program benefits are not provided for eligible construction made for other than dwelling purposes.
Rehabilitation program benefits cannot be applied to abate the taxes upon the land portion of real property, which will continue to be taxed based upon the assessed valuation of the land and the applicable tax rate at the time the taxes are levied.
The legislation provides definitions; rulemaking, application, and reporting requirements; tenant notice and notice of intent requirements; enforcement and penalty provisions, and termination or revocation provisions.
Affordable New York Housing Program
The legislation amends the definition of “eligible multiple dwelling” under the Affordable New York Housing Program. The definition now includes a multiple dwelling that is located on a parcel of land that was part of a tract of land for which a special permit for a large-scale general development was approved via the uniform land use review procedure on or before June 15, 2022. To qualify, a tract must contain a multiple dwelling for which the commencement date is after December 31, 2015, and on or before June 15, 2022. The project also must comply with certain affordability options.
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