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What is a 421-A Tax Abatement?

The 421-A Tax Abatement Program was developed to promote the construction of multi-family dwellings by providing tax relief benefits to the owners of the property. The owners of the new property pay significantly lower taxes for the first ten years of the building’s life. In some buildings, the abatements could last up to 35 years. The tax amount is adjusted every other year until they reach the appropriate tax amount. This program is typically applied to new construction Class 2 properties (i.e. condominiums and cooperatives) and new construction Class 1 properties (i.e. one-, two-, and three-family dwellings).