421-a (1-15) Compliance and Final Certificates in NYC

The previous 421-a program, known as 421-a (1-15), is a partial exemption from New York City property tax for the new construction of Class A multiple dwellings. The program closed to new construction starts at the end of 2015, but the standard post-construction benefits run for as long as 25 years, in addition to any qualifying construction-period exemption, and the filings, rent obligations and phase-out schedules that come with them are very much alive. MGNY Consulting manages the whole tail of the old program: certificates of eligibility, compliance responses, and the arithmetic of what the exemption is worth in each remaining year.

Review an existing 421-a benefit before a purchase, refinance or response deadline. Call (212) 343-1111 with the property address or borough-block-lot number, the latest tax bill and any HPD notice. The review starts with the building’s actual certificate and benefit history.

What is the 421-a (1-15) exemption?

Under 421-a (1-15), an eligible new multiple dwelling is exempt from the increase in real estate taxes that results from the construction work. The benefit applies to qualifying construction-related value rather than eliminating all property tax. The actual bill depends on the applicable assessment, tax rate and benefit year. HPD determines eligibility and issues the certificate of eligibility, and the Department of Finance implements the benefit on the tax roll.

The benefit comes in fixed schedules: a construction period exemption of up to three years, followed by a post-construction term of 10 years (2 years full, 8 phasing out), 15 years (11 full, 4 phasing out), 20 years (12 full, 8 phasing out) or 25 years (21 full, 4 phasing out). The schedule a project received depends on its location, when construction commenced, and the affordability it provided. The Geographic Exclusion Area and affordability conditions depend on the applicable version of the program. HPD’s map effective July 1, 2008 includes all of Manhattan; review the construction date and governing records before applying that map to an older project.

Is the old 421-a still an option?

For new construction, no. A project had to commence construction on or before December 31, 2015 to qualify, and projects that commenced between June 15, 2015 and December 31, 2015 had to complete by December 31, 2019. Later projects belong to 421-a (16), the Affordable New York program, or to its successor.

For buildings that did commence in time, the program is not finished with them. A building that never obtained its final certificate of eligibility still needs one. A suspension or revocation notice needs a review of the available response and any basis for reinstatement. And every building still inside its benefit term carries obligations for as long as the exemption lasts.

What is the 421-a certificate of eligibility?

The certificate of eligibility is the HPD document that entitles a project to the exemption. Historically the program used two: a preliminary certificate at the start of construction and a final certificate of eligibility, the FCE, after completion. Applications for the final certificate go to HPD’s Tax Incentive Programs with a $100 filing fee, supported by the architect’s or engineer’s certification of the aggregate floor area, dwelling units and room count.

HPD identifies properties that have not obtained an FCE by the DOF suspension deadline as suspension properties. A preliminary certificate alone does not replace the required final certificate.

What happens when the paperwork is incomplete?

HPD runs a dedicated 421-a compliance and enforcement function, and the Department of Finance can suspend a benefit while a deficiency stands. Revocation may involve retroactive payments. The affected years and tax consequences depend on the notice and resulting agency determination.

A response review should establish the deadline, missing records and available remedy, then address the final-certificate or compliance issue and any request for reinstatement. Correcting a filing does not itself guarantee that DOF will restore the benefit. If a benefit has already been suspended or revoked, our reinstatement of benefits service picks up that thread.

Rent obligations while the benefit runs

Rent obligations depend on the version of 421-a and the unit history. For income-restricted units in buildings commenced from July 1, 2008 through December 31, 2015, HPD describes affordability and stabilization lasting at least 35 years from completion. Earlier income-restricted units follow different rules, including vacancy and regulatory-agreement conditions. Market-unit status after expiration also depends on applicable rules and lease notices. Keep required annual registrations and lease riders current, and review the HPD rent-stabilization fact sheet with the building’s records before treating any unit as deregulated.

The phase-out, year by year

The standard 10-, 15-, 20- and 25-year schedules described above include a phase-out in which this exemption declines. Other benefits or an approved extension may affect the final bill, so use the building’s actual approval and tax history when projecting the remaining years.

What does the exemption save this year, and what will the bill be in each remaining year? That projection belongs in every underwriting and every budget for a 421-a building, and preparing it is part of our tax opinions and projections work.

What should an owner bring to a 421-a review?

For a 25-year post-construction schedule, the first 21 years are full-exemption years and the last four are the phase-out. The dollar effect still depends on the assessment and tax assumptions. A year-by-year tax projection should show those assumptions rather than promise a fixed future bill.

Coordinate continuing rental obligations with DHCR registration and compliance and rent stabilized lease management. A suspension notice belongs with benefit reinstatement review.

How does MGNY handle the old 421-a?

MGNY Consulting reviews the building’s benefit record at HPD and DOF, completes final certificate of eligibility filings, responds to suspension and revocation notices, assists with reinstatement requests where the facts support them, and projects the phase-out so the remaining exemption and projected tax bills are documented with their assumptions. A review at acquisition can identify missing records and upcoming benefit changes. Call (212) 343-1111 to review a building’s 421-a status.

Official references, checked September 14, 2026: HPD 421-a eligibility and benefit schedules and HPD certificate and compliance requirements.

Frequently asked questions about the old 421-a

What does 421-a (1-15) mean?

It is the shorthand for the original 421-a program, the versions of the law that predate the 2017 Affordable New York program, which is known as 421-a (16). The old program covers projects that commenced construction on or before December 31, 2015.

Is 421-a an abatement or an exemption?

Developers often say “421-a tax abatement”, but technically 421-a is an exemption: it keeps the increase in assessed value from the new construction off the taxable roll. An abatement, by contrast, is a discount applied to the tax bill itself, the way ICAP and the coop and condo abatement work. The distinction matters when reading a tax bill, because exemptions and abatements appear in different places on it.

How long does a 421-a exemption last?

Up to three years of construction period exemption, then 10, 15, 20 or 25 years after completion depending on the schedule the project qualified for. Each schedule ends with a phase-out period in which the exemption declines in steps: the 25-year benefit, for example, runs 21 years full and 4 years phasing out.

What is a 421-a certificate?

The certificate of eligibility issued by HPD, which is what entitles the building to the exemption DOF applies to the roll. HPD requires a final certificate of eligibility to continue benefits after the preliminary stage and lists a $100 application fee.

Can 421-a benefits be revoked?

Yes. DOF can suspend a benefit and HPD can revoke one for noncompliance. An incomplete final-certificate record or unmet program obligation can prompt enforcement. Revocation may involve retroactive payments; the notice and agency determination control the affected years and available response.

What replaced the old 421-a?

The Affordable New York program, 421-a (16), covered projects commencing from 2016 through June 15, 2022, and its completion deadline runs to June 15, 2031 for projects that filed a Letter of Intent with HPD by September 12, 2024 under the eligible affordability options. See our New 421-a page for that program’s filings. For projects starting today, the successor program is 485-x.

For the program as it stands in 2026, and the one that replaced it, see what 421-a is and what 485-x is.

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