J-51 Tax Incentive Reintroduced: Deadlines, Compliance, and Implications for Landlords Update

The New York City Council has officially reintroduced the J-51 Tax Abatement Program after a two-year hiatus. This program, which previously expired in June 2022, offers significant tax abatements and exemptions for landlords who complete qualifying renovations on low-to-moderate-cost residential buildings.

Eligible buildings include:

  • Condominiums and Cooperatives: Units with an average assessed valuation under $45,000.
  • Rental Buildings: Must meet at least one of the following criteria:
    • More than 50% of units are designated as affordable housing.
    • The property is operated by a limited-profit housing company, such as a nonprofit or an affordable housing entity.
    • The building receives significant government assistance, such as subsidies.

2025 Tax Benefits & Deadlines

Owners of eligible multifamily buildings can recover up to 70% of their rehabilitation costs through tax abatements, with benefits lasting up to 20 years. The program applies to renovations completed between June 2022 and July 2026.

For renovations completed after June 2022, landlords have four months to file for J-51 benefits. Additionally, all ongoing renovations must be finalized by July 2026, meaning that most landlords have approximately 17 months to complete qualifying projects.

If you have completed renovations between July 2022 and December 2024, the deadline to apply for J-51 benefits is April 30, 2025. However, the city has yet to finalize its rules whereby additional eligibility criteria may still be introduced (affecting application approvals).

Compliance & Uncertainty

While the program offers valuable incentives, the Department of Housing Preservation and Development (HPD) is still in the process of defining reasonable cost schedules, which will outline eligible work, such as structural repairs and energy efficiency upgrades. Until these guidelines are officially released, the program’s full value remains uncertain.

Despite this, the reintroduction of J-51 signals New York City’s renewed commitment to enhancing housing infrastructure and incentivizing property owners to invest in improvements that contribute to the city’s broader goal of maintaining and expanding affordable housing.

Need Guidance?

If you have any questions about eligibility, compliance, or maximizing J-51 benefits, please contact your KMWB advisor for expert guidance.