421-a
421-a is a NYC property tax exemption for new multifamily construction, granted in exchange for affordability commitments on a portion of units. The program lapsed for new applications on June 15, 2022; its replacement, 485-x (Affordable Neighborhoods for New Yorkers), was enacted in 2024.
Frequently asked questions
How long does 421-a last?
Depending on the version and affordability tier, between 10 and 35 years total, usually with the first 3 years at 100% exemption followed by a graduated phase-down. Affordable New York Option C (35 years) is common in post-2017 large rental conversions.
Does 421-a affect a condo unit's resale value?
Materially, yes. A unit in year 3 of a 25-year benefit period has a far lower carrying cost than the same unit in year 24. Brokers and buyers price this in, and listings should disclose the remaining benefit years.
Can a 421-a benefit be lost?
Yes. Failure to register rent-stabilized units annually with DHCR, failure to file the annual HPD affordability compliance report, or material misrepresentation in the original application can trigger revocation and retroactive tax bills.
Is the new 485-x program a direct replacement?
No. 485-x has higher affordability percentages, prevailing wage requirements on large projects, and longer affordability terms. Underwriting for new construction is materially different — boards forming on new 485-x buildings should expect a different financial structure than 421-a buildings.