Your 421-a Tax Abatement
Is Expiring

If you own a condominium in New York City that was built or converted between 1971 and 2022, there is a meaningful chance your building has a 421-a tax abatement. When that abatement expires — and thousands are expiring between 2025 and 2035 — your property tax bill will increase dramatically. For many owners, the increase will be the single largest shock to their carrying costs since purchase.

What is 421-a?

Section 421-a of the New York Real Property Tax Law was enacted in 1971 to incentivize new residential construction. Under the program, developers receive a partial or full exemption from property taxes for a defined period — typically 10, 15, 20, or 25 years, depending on the program version and location. During the abatement period, the building's property tax assessment is phased in gradually rather than applied at full market value.

The program has been modified, expired, and renewed multiple times. The most recent version — "Affordable New York" (421-a(16)) — expired in June 2022 and has not been renewed as of April 2026. But the abatements already granted under prior versions continue to run according to their original schedules, and hundreds of buildings are now reaching the end of their abatement periods.

The key fact for owners: during the abatement period, you have been paying significantly less in property taxes than the building's actual assessed value would require. When the abatement expires, your tax bill adjusts to the full assessed value — and the increase can be staggering.

What happens when the abatement expires?

The abatement does not expire all at once. Under most 421-a programs, the exemption phases out over a transition period — typically 4 to 8 years. During Phase 1 of the abatement, you may be paying 0% of the full tax bill. During the phase-out, the percentage ramps up: 20% in year one of phase-out, 40% in year two, 60% in year three, 80% in year four, and 100% (full taxes) thereafter.

Here is what this looks like in dollar terms for a typical one-bedroom condo in Manhattan:

In this example, the owner goes from paying $267/month in property taxes to $1,183/month — a $916/month increase, or nearly $11,000 per year. For a two-bedroom in a luxury building, the full-tax number can exceed $25,000 per year. This is not a one-time assessment. This is a permanent increase in your carrying costs.

How to check if your building has a 421-a abatement.

You can check your building's 421-a status through several free sources:

• NYC Department of Finance (DOF): Search your property at DOF Property Tax. Look for "Tax Benefit" or "Exemption" on the property detail page. If you see "421A" or "421-a" with an expiration date, your building has the abatement.
• Your offering plan: The offering plan's tax projection section should disclose the 421-a abatement, its schedule, and the projected tax liability at full value. If you do not have the offering plan, request it from the managing agent or search ACRIS.
• Your annual tax bill: Your property tax bill will show "Exemption Amount" if a 421-a is in effect. Compare the "Total Assessed Value" to the "Billable Assessed Value" — the difference is the abatement.

What the sponsor probably did not tell you.

Many sponsors market condos during the abatement period with language like "low property taxes" or "tax-advantaged." The marketing materials show the current (abated) tax bill. The offering plan discloses the abatement schedule — but in a dense section that most buyers skim or skip. Your broker may emphasize the "low taxes" without explaining that the number will triple in 8 years.

This is not technically a misrepresentation. The information is "available" in the offering plan. But the practical effect is that thousands of NYC condo buyers purchased units with carrying cost assumptions based on abated taxes — and are now discovering that their actual tax burden is far higher than they planned for.

This is one of the 100+ regulatory gaps we document on the issues page: the 421-a transition is opaque to buyers because there is no standardized disclosure requirement. Read our offering plan red flags guide to learn what else to check.

What you can do about it.

If you already own a unit with an expiring 421-a, your options are limited but worth exploring:

• Challenge your assessment: If you believe the DOF's assessed value is too high, you can file a Tax Commission challenge (due March 1 annually). Consider hiring a tax certiorari attorney — but check the fee structure carefully, as contingency-fee firms may charge 25-40% of savings.
• Budget now: Calculate your projected tax bill at full value and begin budgeting for the increase today. Do not wait for the phase-out to begin.
• Factor it into resale: If you plan to sell, disclose the abatement expiration honestly. Buyers who discover it post-contract will seek price reductions — or walk.

If you are buying a condo, check the 421-a status before you make an offer. Use our cost calculator to project your total carrying costs at full tax liability, not the abated rate. Compare the building's post-abatement economics to competing buildings that have already transitioned to full taxes. The "low tax" building may not be the deal it appears to be.