NYC Property Tax Bills Surge as Building Abatements Expire

NYC property tax bills are climbing fast for thousands of buildings as decades-old tax abatements phase out, according to The Wall Street Journal. The Roebling Index estimates that up to 4,800 condo, co-op and rental buildings could lose their breaks between 2023 and 2030.

The Tax Cliff Arrives

The abatements date to a pre-2016 program that offered developers property tax relief, some tied to affordable housing, to spur residential construction. The breaks typically run 10 to 25 years and step down near the end, often by about 20 percentage points at a time, until a building pays the full rate.

For owners, the jump can be dramatic. One Park Slope condo owner told the Journal his annual bill went from $140 in 2022 to $7,600 this year, with $10,500 projected for 2027.

Many buyers were told not to worry. A Harlem co-op owner who bought in 2004 said sellers assured her a replacement program would be in place by the time her abatement ran out.

The Details

The Department of Finance counts roughly 4,100 buildings losing abatements through 2030 and beyond. Roebling, using a different methodology, puts the 2023-2030 figure alone as high as 4,800 buildings covering about 66,000 residential units.

The wave doesn’t stop there. Roebling estimates another 4,600 buildings with about 94,000 units will become fully taxable between fiscal years 2031 and 2040.

Rentals are heavily exposed. About 2,630 rental buildings are phasing out of pre-2016 agreements by 2030, and as many as 40,700 units could lose rent-stabilization status. Corey Cohen of Compass’s Roebling Team noted that whether a given unit actually deregulates depends on lease notices, affordability rules and other regulatory agreements.

Costs Stacking Up

The expirations add to broader pressure on owners, as assessed values climb citywide. Co-op shareholders are feeling it in their maintenance: one Harlem owner along the Madison Avenue corridor above 116th Street said her monthly charge rose from about $1,000 to more than $1,500, with property taxes projected near $10,000 a year by 2031.

Residents there have launched a petition over the looming tax cliff. Local community boards have written to Gov. Kathy Hochul, Mayor Zohran Mamdani and his housing commissioner asking for legislative relief. Some residents worry they won’t be able to afford to stay once the phaseout is complete.

Why It Matters

Cohen said the added cost has to land somewhere: higher rents where regulation and the market allow, lower net operating income for landlords, or eventually lower property values. Sales data already reflects this. His review of more than 37,000 condo sales found that blocks nearing the end of an abatement appreciated 5.4 percentage points less than blocks with years of benefit remaining.

For multifamily owners, the timing is tough. Mamdani campaigned on freezing increases for rent-regulated apartments, a policy already facing a rent freeze challenge in court, which would limit how much of a higher tax bill landlords can pass through.

What’s Next

Some buildings can reapply under the program’s newer version, which offers longer abatements but comes with added affordability, construction and capital-improvement requirements, and in some cases wage rules.

Whether Albany or City Hall steps in with targeted relief will determine how hard the cliff hits. Absent action, owners and renters in thousands of buildings should plan for full tax bills over the next several years.