Owners of newer New York City condominiums are facing higher property taxes, as the once-beneficial tax abatements are starting to expire.
According to an study by StreetEasy, the imminent end of the tax abatements means that not only are property owners facing rising monthly tax bills, but it's making it more difficult for them to lure potential buyers.
For over 20 years, many new condo projects received 421-a or J-51 tax abatements from the city that allowed the owners of these developments to pay lower property taxes--on the condition they build below-market, affordable housing units. The abatements were originally designed to be phased out in 10 to 35 years.
“Now, with the city’s pre- and post-recession building booms fading into the past, and the abatements ending, tax bills on many condo units are rising far faster than they would from higher home values alone,” according to the article.
StreetEasy said that of the 12,000 New York City condos sold in 2010, about 1 in 3 have benefited from an exemption that lowered their tax bills. Now the taxes for two-thirds of those apartments with exemptions have gone up. Breaking it down further, about 15 percent of those condos sold in 2010 have their monthly taxes double, while 10 percent of those condos have seen their monthly taxes triple.