Tax Incentives: 421-b

421-b

Partial tax exemption for NEW CONSTRUCTION , CONVERSION or RECONSTRUCTION of OWNER-OCCUPIED ONE- AND TWO-FAMILY HOMES AND CERTAIN MULTIPLE DWELLINGS

ELIGIBLE PROJECTS

  • New construction or reconstruction of one- and two-family dwellings (“Private Dwellings”) and certain owner-occupied multiple dwellings, and conversion of non-residential properties to Private Dwellings and certain owner-occupied multiple dwellings;
  • Private dwellings must be owner-occupied and may not include commercial or other non-residential space;
  • If the project consists of the reconstruction of an existing Private Dwelling or an existing multiple dwelling, the reconstruction cost must be at least 40% of the pre-reconstruction assessed valuation;
  • In the event that a Private Dwelling is demolished on or after September 1, 2004, the tax lot upon which such Private Dwelling was located is not eligible for 421-b benefits for a period of three years commencing upon the date of issuance of the demolition and removal permit for such Private Dwelling;
  • Construction must commence prior to July 1, 2006.  For private dwellings that commence on or after July 1, 2002, construction must be completed no later than July 1, 2011.  For certain multiple dwellings that commence on or after July 1, 2002, construction must be completed no later than July 1, 2011.

BENEFITS GRANTED

  • Construction period (“preliminary”) benefits: projects that have received a preliminary certificate of eligibility are eligible for a construction period exemption from taxes (other than assessments for local improvements) upon any increase in assessed valuation over the prior assessed valuation for up to two years;
  • Post-construction period (“final”) benefits: projects that have received a final certificate of eligibility are eligible for an eight year tax exemption (two years full exemption plus a six year phase out).

APPLICATION PROCEDURE:

  • Preliminary benefits: in order to receive construction period benefits, a 421-b application must be filed within ninety days of commencement of new construction or reconstruction and prior to the issuance of a temporary or permanent certificate of occupancy; 
  • Final benefits: in order to receive post-construction period benefits, a 421-b application must be filed within ninety days of the issuance of a certificate of occupancy for new construction and within ninety days of completion of construction for reconstruction; 
  • Timely completion of applications: all documentation required to process the application must be submitted to HPD on or before December 31, 2011; 
  • HPD may waive the filing deadline for an application for final benefits if HPD, in its sole discretion, determines that the property owner reasonably relied upon a representation by the seller of the property that the seller would file or had filed a final application, provided that the property owner provides all documentation required to process the application on or before December 31, 2011; 
  • Following issuance of a certificate of eligibility by HPD, the applicant is responsible for filing the certificate and all other appropriate documentation with the Department of Finance.  Please see the Department of Finance's 421-b websitefor more information.

NOTICE

Notice of Adoption of Revocation Rule Amendments

The Department of Housing Preservation and Development adopts amendments to rules relating to revocation of tax benefits. The rule amendment reflects what has traditionally been HPD’s practice by clarifying HPD’s ability to revoke tax benefits granted before all eligibility criteria are fulfilled when those criteria are not fulfilled in a timely manner.  The rule amendment also clarifies the wording of §39-05 to unambiguously reflect HPD’s policy of delivering notices by mail to both the fee owner and, where relevant, the mortgagee, in addition to the notices delivered by mail to the real property tax bill addressee and both the agent and the owner identified in the multiple dwelling registration. Finally, the proposed rule amendment adds “Noticed Property” as a defined term, in order to put §39-05 in plainer English and thus make it easier to read and understand.

Effective Date: April 14, 2017 


Notice of Adoption of Rules Governing Tax Exemption under §421-b of the Real Property Tax Law 

FORMS AND INFORMATION

Unless otherwise noted, the following forms are available in .PDF format. You will need the latest copy of the Adobe Acrobat Reader to download and print the forms.  This program can be downloaded for free at Acrobat and the Web.

To obtain additional information or to request an application, please call Customer Service at: (212) 863-8540.

HOW TO APPLY

Submit completed applications to:
421-b Program
Tax Incentive Programs
Department of Housing Preservation and Development
100 Gold Street, Room 8-C09
New York, NY  10038.
There is a $125 application fee per new home and a $10 application fee per reconstructed home payable at the time of submission.

OFFICE HOURS

Summary of office hours:
Walk-in hours: Mondays and Wednesdays between 10:00am-12:00pm and 1:00pm-3:00pm;
Appointments: Tuesdays and Thursdays between 9:00am-12:00pm and 1:00pm-4:00pm;
No walk-ins or appointments on Fridays. Customers may still call customer service at (212) 863-8540