NY just extended the J-51 tax abatement – Five key details condo & co-op boards need to know
Herrick Litigation partner, Bruce Cholst, was quoted in Brick Underground discussing Gov. Hochul’s $269 billion state budget that revived a crucial tax break aimed at helping co-op and condo buildings complete essential capital improvements. The J-51 tax abatement, which was set to expire at the end of the month, is now back with expanded eligibility and bigger benefits.
"We hit a three run triple," said Bruce, who was involved in lobbying for the legislation. "The escalation is a very big victory because it preserves the benefit," Bruce added. It means fewer buildings will cycle out of the program as the average assessed value increases annually.
Bruce added, "You are going to get more of a benefit for the work done." NYC Housing Preservation and Development prepares the list of the types of improvements eligible as well as a reasonable cost schedule—that is, the reasonable cost for a specific type of project.
NYC legislation and rule-making are still required to enact the program. In most cases laws and amendments included in the executive budget do not need ratification by the city. However, in this case, the city does need to pass legislation before it moves forward. "It’s a complication," Bruce said.
There’s no suggestion the rule making won’t happen, but in the past the process has taken several months and that introduces an element of uncertainty to the program. For eligible co-op and condo boards that complete work in July, patience will be key.