Frequently Asked Questions (FAQ)

Tax Abatement/Exemption FAQ

Click a topic, or press the enter key on a topic, to reveal its answer.

My building is subject to rent stabilization because my landlord receives a tax break from the City. Will rent stabilization coverage continue after the landlord no longer benefits from the tax break?

If a new building is constructed or an old building is fully rehabilitated the owner can receive an abatement/exemption from real estate taxes for a prescribed period from the City. In return for this tax benefit, the building is placed under rent stabilization. After the benefits expire, rent stabilization coverage may expire if the landlord follows the correct procedure.

If the building was rehabilitated or converted from another use, the abatement is known as a J-51 tax abatement. If it is recently constructed, the abatement may be known as a 421-a tax abatement.

The expiration of J-51 benefits does not always affect the stabilization status of buildings. If the building was rent stabilized before the tax benefits were applied, then the expiration of those benefits would not affect the building's regulated status. But if the units received stabilization status as a result of its J-51 tax benefits, then whether or not the building loses rent stabilization protection would depend on whether the owner gave proper notices in the lease and each renewal.

ONLY when a building was converted from nonresidential space to residences or was fully rehabilitated does the expiration of benefits mean the end of stabilization in the building. If your building falls into one of these categories, the owner may deregulate the apartment if the lease and each renewal contains a prominent notice (in 12-point type) informing the tenant that:

  • the unit shall be subject to deregulation upon the expiration of the tax benefits; and
  • the approximate date on which the tax benefits are to expire.

If the lease contains the proper notice, coverage expires when the last lease commencing during the benefit period expires.

If no such notice is included, a tenant in occupancy retains the full benefits of rent stabilization, including the right to renewal leases.

Under the 421-a program, if the apartment became subject to rent stabilization after July 1, 1984, the apartment will undergo deregulation if the owner has included a prominent notice in the lease and each renewal that stabilization coverage will expire following expiration of the tax benefit and the approximate date of such expiration. As with the J-51 program, protection will continue until the end of the last lease signed while the benefit period was in effect. However, apartments in buildings constructed under the 421-a program which became subject to rent stabilization before July 1, 1984, remain rent-stabilized tenants until the first vacancy occurs after the expiration of the tax benefits, even if the vacancy occurs long after the tax benefits have expired. This vacancy deregulation does not occur if the vacating tenant was forced out through harassment.

To find out if your building is a part of the J-51 or 421-a programs, contact the city by calling 311. Also see NYC Tax Incentive Programs and 421-a HPD. More details can also be found in HCR Fact Sheet #41: Tax Abatements. If you have any further questions about the expiration of tax abatements, contact NYS Homes and Community Renewal (HCR), the state agency which administers the rent laws.

When a tax exemption expires on my building, will I still be stabilized if my rent exceeds $2,700 per month?

Apartments in buildings that are receiving certain real estate tax benefits (e.g. "421-a or J-51") are not eligible for High-Rent Vacancy or High-Rent High-Income Deregulation at least for as long as such benefits continue. Once the abatement expires, the apartment may be subject to deregulation if the landlord follows the proper procedures. More details can be found in our Deregulation FAQ as well as in HCR Fact Sheet #41: Tax Abatements. For further info, contact NYS Homes and Community Renewal (HCR), the state agency which administers the rent laws.

How do I find out when the abatement expires?

Your landlord should have included a clause in your lease indicating the date of expiration. Without this notice, the landlord may not be entitled to deregulate the apartment. To find out the length of the exemption, and the period it is effective, see NYC Tax Incentive Programs.

How high can the landlord raise my rent once my apartment has been deregulated?

Once deregulated, the landlord may negotiate a market rate lease.

I live in a 421-a building. May the landlord charge rent in addition to the guideline increases?

Landlords of 421-a buildings are allowed to tack on an additional 2.2% increase for the decrease in the value of the tax exemption over the period of the abatement. Once deregulated, the landlord may negotiate a market rate lease. More details can be found in HCR Fact Sheet #41: Tax Abatements.

If you believe you are being overcharged, you may file a rent overcharge complaint NYS Homes and Community Renewal (HCR), the state agency which administers the rent laws.

Can I fight the increase when the tax abatement on my building expires?

While there is no mechanism to stop the expiration of a tax benefit, under some circumstances tenants will remain under stabilization after the tax benefits expire. We suggest that you consider the following:

Confirm that the tax benefits are about to expire by calling the NYC Department of Finance (dial 311) or see NYC Tax Incentive Programs.

In J-51 buildings, find out if the building became rent stabilized because the landlord accepted the benefits. The most common examples would include gut rehabilitation projects, commercial spaces converted to residential use, and buildings with less than six units. If the building was already stabilized, the expiration of the tax benefits should not result in deregulation.

In 421-a buildings, units entering stabilization before July 1, 1984 are subject to deregulation only after the first vacancy following expiration of the benefits - unless the vacancy was the result of harassment.

Check your lease(s). They should contain language regarding the tax benefits, the approximate date of expiration of the benefits, and the fact that your unit would be destabilized when the benefits expire.

If you find that there is anything out of order, you could retain an attorney or investigate further. See our Legal Assistance page. Otherwise, if the landlord has followed the correct procedures, it is his/her right to deregulate the apartments.