Key Takeaways
- Proposed changes to New York’s J-51 R program would raise the per-unit assessed value cap for co-op and condominium units to $60,000 and extend eligibility for tax abatements through June 30, 2036.
- Affordable property owners could receive tax abatements covering up to 100% of eligible renovation costs — an increase from the current 70% limit.
- The Department of Housing Preservation and Development would need to revise its certified cost schedule for eligible renovations at least every three years.
The J-51 R tax incentive program is a New York state initiative that offers incentives for landlords of affordable properties to complete qualifying upgrades in exchange for real estate tax abatements. As part of the proposed New York state budget, lawmakers are considering changes that would expand and extend the program’s benefits.
If approved by the New York state legislature, this could enable more affordable property owners to have more time to complete certain projects and take advantage of a higher property tax credit.
Overview of the Proposed Changes
We’ve outlined the most significant proposed changes in the chart below:
Program Feature | Current J-51 R Guidelines | Proposed Changes |
Project cost coverage | Up to 70% of eligible project expenditures for eligible properties. | Up to 100% of eligible project costs. |
Project completion deadline | Eligible projects must be completed by June 30, 2026. | Deadline extended to June 30, 2036. |
Eligible assessed value threshold | Co-ops and condominiums with an assessed value of up to $45,000 per unit. | Threshold increased to $60,000 per unit. |
Aside from the proposed changes, the tax break will still be spread out over a period of up to 20 years and rental properties must continue to have at least 50% of units that are considered affordable to be eligible for the abatements. In addition, the Department of Housing Preservation and Development would be required to update its certified cost schedule for eligible renovation expenditures every three years.
Looking Ahead
A decision whether to approve the proposed changes is expected to occur within the next few months.
Contact Us
If you have any questions, please contact your PKF O’Connor Davies client service team or:
Samuel E. Botta, CPA
Partner
sbotta@pkfod.com