The 421-a Tax Incentive is a partial tax exemption for new multiple dwellings.
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Eligible Projects
New construction of multiple dwellings on lots which were vacant, predominantly vacant or improved with a non-conforming use three years prior to the start of construction. Buildings in the exclusion area are not eligible unless they contain 20% affordable units. Projects must commence construction on or before December 31, 2015. Projects that commenced between June 15, 2015 and December 31, 2015 must have been completed on or before December 31, 2019.
Exclusion Areas
Generally, buildings within these areas must meet additional affordable housing requirements to be eligible for benefits.
Benefits Granted
Construction period exemption (up to 3 years) plus 10-year (2 years full + 8 years phase out), 15-year (11 years full + 4 years phase out), 20-year (12 years full + 8 years phase out), or 25-year (21 years full + 4 years phase out) post-construction exemption from the increase in real estate taxes resulting from the work.
The length of benefits depends on location, commencement of construction, and affordability in the project.
All market rate rental units become subject to rent stabilization for the duration of the benefits, with initial rents approved by HPD. Affordable rental units are rent stabilized for 35 years.
Procedural Requirements
The developer applies to HPD and receives a Certificate of Eligibility. The Department of Finance (DOF) implements the benefits. Benefits may be applied once construction begins.
DOF Suspension
For more information regarding compliance of 421-a requirements, please contact the Division of Compliance and Enforcement at 212-863-7676.
How to Apply
*Important COVID-19 Update*
In light of the current COVID-19 outbreak, HPD is authorizing alternative means of application submission and fee payment. See the About Tax Incentives webpage for more information.
A $100 fee must be submitted at the time of application submission.
Submit completed application to: 421-a Program, Tax Incentive Programs, Room 8-C09, HPD, 100 Gold Street, New York, NY 10038. There is a $100 application fee.
Office hours are suspended until further notice. Please contact 421a_customerservice@hpd.nyc.gov or call (212) 863-8540.
Additional Information
421-a Geographic Exclusion Area (GEA) effective July 1, 2008
Please visit the following links on DOF's webpage for additional information regarding which properties are receiving 421-a and to look up a specific property or apartment to find information regarding its benefit start and end dates, current benefit year, and benefit amount.
421-a (1-15) Report
*NEW* On April 20, 2024, the 421-a(16) completion deadline of June 15, 2026 was extended to June 15, 2031 for projects that submit a Letter of Intent no later than September 12, 2024 and that select Affordability Options A, B, D, E, or F. See below for instructions on filing the Letter of Intent.
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New 421-a Program
The New 421-a Program is available to projects that commence construction between January 1, 2016 and June 15, 2022, and are completed on or before June 15, 2026. Projects that commenced construction on or before December 31, 2015 also may opt into the New Program if they have not as yet received 421-a benefits.
Only one application would be required, it would have to be filed within one year after completion, and construction benefits would be retroactive.
Projects that do not receive the enhanced 35 year benefit would have to comply with the affordability requirements and other requirements for 35 years. Projects that receive the enhanced 35 year benefit would have a 40 year compliance period.
A market unit shall be subject to rent stabilization unless, in the absence of 421-a benefits, the owner would be entitled to remove such market unit from rent stabilization upon vacancy by reason of the monthly rent exceeding any limit established thereunder.
Changes to Real Property Tax Law 421-a
Chapter 20 of the Laws of 2015, which took effect on June 15, 2015, made the following changes to Real Property Tax Law Section 421-a:
Chapter 59 of the Laws of 2017, which took effect on April 10, 2017, renamed tax exemptions issued pursuant to Real Property Tax Law Section 421-a as the Affordable New York Housing Program and activated the New Program by legislatively establishing requirements discussed further below regarding minimum average hourly wage requirements for construction workers in rental projects containing three hundred or more dwelling units. Chapter 59 of the Laws of 2017 made additional changes to the New Program that are referenced separately above in the New 421-a Program section.
Eligible Rental Projects
Eligible rental projects that are not entitled to the enhanced 35 year benefit would receive:
These rental projects would be required to choose one of three affordability options and comply with it for the entire benefit period:
Option A
Option B
Option C
Eligible rental projects with 300 or more dwelling units that either are located in one of the enhanced affordability areas (portions of Manhattan, Queens and Brooklyn) or elect to comply with the minimum average hourly wage requirements for construction workers, would receive:
Option D Homeownership Projects
Eligible homeownership projects would receive:
These rental projects would be required to choose one of three affordability options and comply with it through the extended restriction period (40 years from completion):
Option E
Option F
Option G
Approval, denial or termination of these tax exemption benefits cannot be based upon compliance with the minimum average hourly wage requirements for construction workers. Furthermore, a project labor agreement satisfies the requirements, and eligible multiple dwellings with at least 50% of their units affordable to and restricted to occupancy by persons or families at or below 125% of Area Median Income, are exempt. The New York City Comptroller is the enforcement agency for the minimum average hourly wage requirements for construction workers.
Other Provisions of the New Program
How to Apply
*Important COVID-19 Update*
In light of the current COVID-19 outbreak, HPD is authorizing alternative means of application submission and fee payment. See the About Tax Incentives webpage for more information.
A fee of $3,000 per dwelling unit must be submitted at the time of application submission.
Office hours are suspended until further notice. Please contact 421a_customerservice@hpd.nyc.gov or call 212-863-8540.
Letter of Intent for 421-a(16) Completion of Construction Extension
Qualifying rental projects and homeownership projects with a completion date between June 16, 2026 and June 15, 2031 were provided until September 12, 2024 the opportunity to submit a Letter of Intent form ("the Form") to meet the requirement of RPTL 421-a(16)(a)(xxviii)(2) to notify HPD of their intention to apply for Affordable New York Housing Program (“ANYHP”) Benefits as an Eligible Multiple Dwelling upon a Completion Date that is on or before June 15th, 2031.
Questions regarding the submission of the Form can be directed to:
Email: 421-a16_extension@hpd.nyc.gov
Phone: (212) 863-6603
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421-a(17) Program
Chapter 20 of the Laws of 2015, which took effect on June 15, 2015, made the following changes to Real Property Tax Law Section 421-a:
During this additional benefit period, the owner would be required to:
The first requirement is identical to the existing affordability requirement applicable to such projects (it simply extends that requirement for an additional 10 or 15 years). The second requirement is an increase over and above the existing affordability requirement.
How to Apply
*Important COVID-19 Update*
In light of the current COVID-19 outbreak, HPD is authorizing alternative means of application submission and fee payment. See the About Tax Incentives webpage for more information.
A fee of $3,000 per dwelling unit must be submitted at the time of application submission.
The first requirement is identical to the existing affordability requirement applicable to such projects (it simply extends that requirement for an additional 10 or 15 years). The second requirement is an increase over and above the existing affordability requirement.
Office hours are suspended until further notice. Please contact 421a_customerservice@hpd.nyc.gov or call (212) 863-8540.
For Tenants: If your rental building is receiving a 421-a property tax benefit, your building and/or apartment may be subject to rent stabilization and the rights and protections that come with it. The 421-a & Rent Stabilization Fact Sheet is intended to lay out basic information about 421-a and rent stabilization, explain how to learn about the status of your building and apartment, and provide contact information for additional guidance.