Tax Incentives: 420-c

420-c

Complete or partial tax exemption for low-income housing developed with tax credits

ELIGIBLE PROJECTS

Projects which are:

  1. Owned or leased for at least 30 years by a corporation, LP, or LLC, of which at least 50% of the controlling interest is held by a tax exempt 501(c)(3) or (4) charitable organization whose purposes include low-income housing, or a wholly-owned subsidiary of such charitable organization, and;
  2. Subject to an HPD approved regulatory agreement which requires use as low-income housing, and;
  3. Currently or formerly financed with federal low-income housing tax credits.

BENEFITS GRANTED

Complete or partial exemption from real estate taxes for the term of the regulatory agreement up to a maximum of 60 years. HPD may impose a payment in lieu of taxes (PILOT) as a condition for the exemption. There is no exemption for commercial space.

PROCEDURAL REQUIREMENTS

The developer applies to Tax Incentive Programs (TIP) and receives a Certificate of Eligibility. The Department of Finance implements the benefits.

NOTICES

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

HOW TO APPLY

You may either submit a 420-c Application Online  (recommended) or download and submit the paper application. 

UPDATED 420-c Paper Application (required for all paper submissions on or after July 1, 2019)

For modifications to existing paper applications, or new applications submitted before July 1, 2019, the previous form is available here.

Submit completed forms to: 420-c Program, Article XI & 420-c Unit, HPD, 100 Gold Street, Room 9-Z3, New York, NY 10038.
Application Fee: $100
Processing Fee (Payable before file is completed):
For SRO (Class B units): $60 per unit
For All Other (Class A units): $80 per unit
For additional information please contact Director, John Leonard at (212) 863-6603.

MORE INFO

420-c Legislation Overview and FAQ