How 421-a works, when it expires, and what the 485-x replacement means for your condo purchase
A 15-year 421-a abatement gives a building 11 years of full exemption and then 4 years of phase-out, while a 25-year abatement gives 21 full years and 4 phase-out years. Those are the NYC Department of Housing Preservation and Development's published terms for the 421-a (1-15) program, and they decide when your property tax bill jumps. In my 25+ years selling condos across Manhattan and Brooklyn, I have watched buyers celebrate a low tax bill at closing and then face sticker shock when the abatement steps down. This guide explains how the 15-year and 25-year versions work, how to check any building, and what to do before you make an offer.
421-a is a property tax exemption that encourages new residential construction in NYC. Created in 1971, it exempts a new building from the increase in real estate taxes that results from the construction. The exemption phases out over time, so the tax bill you see at purchase is not the permanent cost: it rises as the benefit steps down and ends.
| Program | Post-construction benefit | Full exemption | Phase-out |
|---|---|---|---|
| 421-a (1-15), 10-year | 10 years | 2 years | 8 years |
| 421-a (1-15), 15-year | 15 years | 11 years | 4 years |
| 421-a (1-15), 20-year | 20 years | 12 years | 8 years |
| 421-a (1-15), 25-year | 25 years | 21 years | 4 years |
| 421-a (16), homeownership | 20 years | 14 years | 6 years at 25% exemption |
Source: NYC HPD, 421-a program page. Each term also includes a construction-period exemption of up to 3 years.
The 421-a (1-15) program covered projects that started construction by December 31, 2015. The 421-a (16) Affordable New York program covered projects that started between January 1, 2016 and June 15, 2022. For a rental project under 421-a (16), the benefit runs 35 years; the homeownership version in the table has a $65,000 per-unit assessed value cap, and it cannot be in Manhattan or have more than 35 units.
In a 15-year building, the exemption is full for the first 11 years, then shrinks through years 12 to 15, and from year 16 you pay the tax on the full assessed value. In a 25-year building the same climb happens in years 22 to 25. The savings you capture is the difference between the tax bill with and without the exemption, so the number that matters is the year your own tax bill steps up. I advise every buyer to model the post-abatement bill before making an offer. The offering plan includes the abatement schedule, and your attorney should review it.
Take the building's first year of exemption, add the full-exemption years from the table, and that is when the phase-out starts. A 15-year abatement that began in 2016 starts phasing out in 2027 and ends after 2030. Confirm the actual dates in the offering plan, since the benefit clock starts at completion, not at your closing.
Newly built condos in Manhattan and Brooklyn, many with active tax abatements
50 W 66TH Street #7A
Lincoln Square
695 1ST Avenue #35J
Murray Hill
Listing information provided courtesy of the Real Estate Board of New York's Residential Listing Service (RLS). Information is deemed reliable but not guaranteed. Sale listings verified. ©2026 REBNY. RLS data displayed by Keller Williams NYC.
There are three reliable ways to check:
After the 421-a window closed, Albany passed the 485-x Affordable Neighborhoods for New Yorkers program as part of the 2024 state budget, with its own affordability and wage requirements. New construction condos in Queens, Brooklyn, and Manhattan will continue to carry tax abatements, but the terms differ from the older 421-a versions. Always verify which specific program applies to the building you are considering.
Abatements are neither good nor bad. They are a variable to model before you sign, and I build them into the due diligence process. If you need help running the numbers on a specific property, contact me and we will work through it together.
Newly built condos in Manhattan and Brooklyn, many with active tax abatements
252 SOUTH Street #64G
Two Bridges
1 GRAND ARMY Plaza #5M
Prospect Heights
Listing information provided courtesy of the Real Estate Board of New York's Residential Listing Service (RLS). Information is deemed reliable but not guaranteed. Sale listings verified. ©2026 REBNY. RLS data displayed by Keller Williams NYC.
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Disclaimer: All information provided in this article is for educational purposes only and does not constitute legal, financial, or real estate advice.
Listing data sourced from the REBNY Residential Listing Service (RLS). Information is deemed reliable but not guaranteed.
Milton Coste is a Licensed Real Estate Associate Broker affiliated with Keller Williams NYC,
360 Madison Avenue, 9th Floor, New York, NY 10017. License No. 10301213304.
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Milton Coste
Licensed Real Estate Associate Broker · Keller Williams NYC
License No. 10301213304 · 360 Madison Avenue, 9th Floor, New York, NY 10017
