Real Estate Weekly
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Deals & Dealmakers

City threatens to suspend 421-a benefits for 3,103 rental buildings

The city’s Department of Finance has sent letters notifying owners of 3,103 rental buildings, with 37,141 apartments, that their 421-a tax benefits will be suspended if they don’t comply with the requirements of the 421-a program.

Photo by sanchez jalapeno/ Flickr
Photo by sanchez jalapeno/ Flickr

The action coming out of a multi-year and multi-agency enforcement effort to ensure that property owners receiving 421-a benefits are in compliance with the law. If these buildings were not getting 421-a benefits, their owners would pay $304 million in property taxes to New York City this year alone.

The enforcement action targets rental projects that have received 421-a benefits for at least five years but have not yet filed a required Final Certificate of Eligibility (FCE) with DOF. The letters give owners notice that the tax exemption will be suspended unless they submit their FCE. Buildings that do not comply within the 13-month deadline could have their benefits revoked by HPD.

Approximately 173,000 units received 421-a tax benefits, worth $1.2165 billion in forgiven taxes, in fiscal year 2016.

Council Member Stephen Levin, said, “It’s unconscionable that property owners are receiving millions in tax breaks to provide community benefits and are instead charging rents that push New Yorkers out of their homes.”

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