By Samuel E. Botta, CPA, Partner
Key Takeaways
1. New York City reinstates J-51 Property Tax abatement for residential improvements.
The NYC Council revived the J-51 Abatement Program in December 2024, offering property tax relief to eligible residential property owners for qualifying renovations and conversions. The program is designed to promote affordable housing and improve aging residential infrastructure across the city.
2. Eligibility targets affordable housing, co-ops and rental buildings.
Eligible properties include co-ops and condominiums with assessed unit values of $45,000 or less, and rental buildings where at least half of the units are part of an affordable housing program. Properties must complete improvements between June 29, 2022 and June 30, 2026 to qualify for the abatement.
3. Tax relief covers 70% of qualified improvement costs over time.
The updated J-51 program provides a property tax abatement equal to 70 percent of residential improvement costs, distributed over 12 to 20 years. Annual abatements are capped at 8.3 percent of the total renovation costs, helping offset long-term capital investment without exceeding defined thresholds.
The New York City Council reinstated and extended the J-51 Abatement Program on December 18, 2024. This program provides various properties with property tax abatements as partial reimbursement of the cost of major capital improvements and expenditures to convert properties to residential use.
Background
The J-51 abatement and exemption program is a tax incentive program that provides eligible residential building owners with property tax abatements for residential rehabilitation. The program is administered by the NYC Department of Housing Preservation and Development (HPD) and the NYC Department of Finance. The program’s revival encourages more residential improvements in rental buildings, affordable housing properties, co-ops (particularly Mitchell Lama co-ops) and condominiums with lower assessed values.
Eligible Units
Co-ops and condominiums that have units with assessed values at or below $45,000 are eligible for the J-51 abatement (this is equivalent to approximately $450,000 of actual market value). Also eligible are rental properties that:
- Have at least half of the units in an affordable housing program and
- Are operated by limited-profit housing companies or receiving some type of government assistance.
Further, the abatement applies to eligible buildings where improvements are completed between June 29, 2022 and June 30, 2026. Building owners may apply for the abatement within four months of the renovations being completed. For renovations already completed, building owners have until April 18, 2025 to apply. HPD has yet to provide a list of eligible improvements under the program.
Abatement Amount
The revised J-51 program will provide eligible properties a tax abatement equal to 70% of the costs of the residential improvements spread out over a period of 12 to 20 years. The maximum annual abatement amount cannot exceed 8.3% of the total improvement costs.
Contact Us
For more information about this program, contact your PKF O’Connor Davies client service team or:
Samuel E. Botta, CPA
Partner
sbotta@pkfod.com | 646.699.2857