Tax Filings And Services at Metropolitan Realty Exemptions

At Metropolitan Realty Exemptions Inc., we pride on servicing our clients for the past twenty years in all their property Tax Incentive Program filing needs.

We understand the effect and burden of the property taxes liabilities following completion of construction due to increased improved value, coupled with complicity of developing a new building or conduct an alteration of an existing building, we are therefore committed in making the property tax filing as easy as possible.

421a Affordable New York Affordable Marketing Agents J-51ICAPInclusionary Housing
MDR Annual FilingsNonprofit ExemptionDHCR Annual FilingsDLS FilingsFresh Program

421a Affordable New York

Offered For: New Construction Residential buildings, or Existing building adding more than 50% of square footage

The 421-a(16) Affordable New York Housing Exemption program is a partial tax exemption available for new buildings constructed throughout the five boroughs, with a minimum of 6 residential units. In order to qualify for the abatement, 25-30% of the units must be allocated for affordable housing in accordance to one of three options available.

See below a detailed chart of the three options available.

Option A

  • 25% of the units must be affordable; at least 10% of AMI, 10% at up to 60% AMI, and 5% at up to 130% of AMI.
  • The project cannot receive any government subsidies other than tax-exempt bond proceeds at 4% tax credits.
Option B
  • 30% of the units must be affordable: at least 10% at up to 70% of AMI and 20% at up to 130% of AMI.
Option C
  • at least 30% of the units must be affordable at up to 130% of AMI;
  • the project cannot receive any government subsidies
  • the project cannot be located south of 96th Street in Manhattan or in any other area established by local law.

The affordable units must be marketed with the New York City Housing Preservation and Development (HPD) as detailed below. The 421-a exemption will retain the property taxes based on the Base Year (A year prior to construction) Assessed Value for up to 3 years during construction and for a 35-year period post construction.

Prevailing Wage
If building of e then 30 Units All building service employees employed by the applicant at the extended affordability property shall receive the applicable prevailing wage for the entire extended affordability period.

Affordable Marketing Agents

We service New York City’s developers and individuals qualifying to apply for the 421-a(16) Affordable New York Housing Program detailed above. With our advanced cutting-edge software system and professional staff, we are recognized to be the number one choice when it comes to marketing affordable units in New York City.

We will bring you expeditious results in getting your affordable units rented in a timely manner, taking you from the first step of getting your building assigned with HPD affordable market unit up to the successful leasing of the units to qualifying applicants.

“Reside New York” works together with rental brokerage firms in New York City to get qualifying tenants in a timely manner.

Find out more at: WWW.RESIDENEWYORK.COM

J-51

The J51 tax incentive program is designed for renovations and conversions on existing residential buildings. The J51 program provides 2 distinct benefits:

Tax Exemption
The J51 exemption portion effectively freezes a building’s increase in assessed value, resulting from the alteration or improvement of a building or structure, except insofar as the gross cubic content of the building is increased thereby and for the prorated commercial area of the building. The exemption will last for a period of fourteen years, with 100% exemption for ten years followed by a 20% phase-out in each of the succeeding four years.

Tax Abatement
The J51 abatement benefits serve to reduce the property’s tax liability otherwise payable. For renovation of a residential building, the abatement is calculated and determined based on 90% of the lesser of: 1) the “Certified Reasonable Cost” (CRC) of the eligible alteration or improvement as established by the NYC Department of Housing Preservation and Development (HPD); or 2) a maximum allowance of $15,000 per one-bedroom apartment with a per-apartment increase of $2,400 for each additional bedroom. Resulting abatement benefits are reduced by ineligible portions of the converted structure. The total approved abatement amount is then administered at 8.33% per annum up until 90% of the CRC is exhausted, for no more than 20 years.

ICAP

To qualify, Industrial and commercial buildings must be built, modernized, expanded, or otherwise physically improved.

ICAP for New Buildings:
If an ICAP is being filed on a vacant land for the purpose of developing a new building, the entire increase due to the construction will be offset by the ICAP for the life of the program. The ICAP will run for a duration of 15 – 25 years, depending on the property’s location and commercial usage, with a 10% – 20% phase out over the last few years of the life of the benefits.

ICAP for Alterations:
In the event of a rehab alteration of an existing building, the ICAP will freeze the taxes to the assessed value prior to the issuance of the construction permits, with a 15% increase due to the physical improvement. The ICAP will run for a duration of 15 – 25 years, depending on the property’s location and commercial usage, with a 10% – 20% phase out over the last few years of the life of the benefits.

As per the rules and regulations by the NYC DOF the ICAP preliminary filing must take place prior to the issuance of the construction permits. Failure to comply, may result in the loss of the ICAP benefits.

Dept. of Labor Services Requirements
As per the Rules & Regulations by the Division of Labor Services (DLS) and in accordance with the obtainment of the ICAP benefits for projects for which the hard construction costs are $2.5 million or more, it is required compliance with federal, state, and local equal employment opportunity obligations.

The requirements include the submission of an Employment Report, for the owner, containing information of the employment policies and practices and workforce composition. Subsequently, the DLS will analyze the report to determine if the contractor maintains nondiscriminatory hiring and employment practices. In addition, it is required that every subcontractor, whose contract is less than a million, submits a less than a million affidavit. If the amount remitted to the subcontractor exceeds $1 million, an employment report will be necessary, as well as monthly payroll records for all of his employees.

The Dept. of Labor Services also requires the solicitation of minority firms (MWBE) for each trade. 3 minority firms should be solicited for each trade.

We at Metropolitan Realty Exemptions will guide you through the entire process up to the obtainment of the DLS approval letter.

Inclusionary Housing

The Voluntary Inclusionary Housing Program (VIH) provides bonus floor area if the developer chooses to create permanently affordable housing. A maximum of 20% of the Residential Floor Area is required to be set aside to tenants at 80% of the Area Median Income (AMI). In order to qualify for the bonus floor area, the project must be located in the Inclusionary Housing Designated Area.

The Mandatory Inclusionary Housing Program (MIH) requires permanently affordable housing to be provided in order to obtain alteration or new building permits from the Dept. of Buildings. The MIH affordable housing options are detailed below; though, each area will have specific options applied. The maps and applicable options can be seen on Appendix F of the NYC Zoning Resolution.

The MIH affordable housing options:

Option 1: 25% of the Residential Floor Area needs to be set aside at a weighted average of 60% AMI, with at least 10% set aside at 40% AMI

Option 2: 30% of the Residential Floor Area needs to be set aside at a weighted average of 80% AMI

Option 3 (Deep Affordability Option): 20% of the Residential Floor Area needs to be set aside at a weighted average of 40% AMI

Option 4 (Workforce Option): 30% of the Residential Floor Area needs to be set aside at a weighted average of 115% AMI, with a least 5% set aside at 70% AMI and 5% set aside at 90% AMI

Affordable Housing Contribution – developers of projects that have less than 26 residential units and 25,000 sq. ft. of Residential Floor Area have the option of contributing to the affordable housing fund instead of providing affordable housing.

Projects with no more than 10 residential units and 12,500 sq. ft. of Residential Floor Area are exempt from the MIH requirements

The IH units may be used to satisfy other affordable housing program requirements. Our firm is actively involved in each project, from the designing phases through issuance of HPD’s Completion Notice. We work with HPD and the entire development team to ensure the smoothest & most efficient approval process. To check if the Inclusionary Housing Program applies to your property, click here.



The information provided is for informational purposes. There are additional requirements and considerations involved. Feel free to reach out to our Inclusionary Housing consultants to discuss feasibility.
The Inclusionary Housing Program is administered by NYC Department of Housing Preservation and Development (HPD).

MDR Annual Filings

Property owners of residential buildings are required by law to register annually with HPD if the property is a multiple dwelling (3+ residential units) or a private dwelling (1-2 residential units) where neither the owner nor the owner’s immediate family resides.

Building registrations must also be filed annually by September 1st or whenever ownership changes or whenever the information on a valid registration changes (example, new managing agent or site management). HPD uses the contact information supplied in the registration for all official notifications, as well as in the event of an emergency at the property.

Our firm will file the MDR application for you annually and fill out all required documentation.

DHCR Annual Filings

State Law requires owners of housing accommodations regulated by NYS Rent Stabilization laws to file an annual rent registration with the NYS Division of Housing and Community Renewal (DHCR) and to provide each tenant in occupancy on April 1 with a copy of the registration which pertains to the tenant’s unit. Our knowledgeable staff will guide you through the regulations and requirements and file the applicable DHCR registrations with NYS Division of Housing and Community Renewal.

Nonprofit Exemption

The Nonprofit Exemption is designed for properties owned and occupied by a Nonprofit organization and used solely for Nonprofit purposes. The program provides a 100% tax exemption if there are no variations in the occupancy or usage of the property. All Nonprofit Exemptions must be renewed annually in order to retain the benefits. Metropolitan Realty Exemptions assist you in obtaining an exempt real tax liability status.

DLS Filings

Dept. of Labor Services Requirements
As per the Rules & Regulations by the Division of Labor Services (DLS) and in accordance with the obtainment of the ICAP benefits for projects for which the hard construction costs are $2.5 million or more, it is required compliance with federal, state, and local equal employment opportunity obligations.

The requirements include the submission of an Employment Report, for the owner, containing information of the employment policies and practices and workforce composition. Subsequently, the DLS will analyze the report to determine if the contractor maintains nondiscriminatory hiring and employment practices. In addition, it is required that every subcontractor, whose contract is less than a million, submits a less than a million affidavit. If the amount remitted to the subcontractor exceeds $1 million, an employment report will be necessary, as well as monthly payroll records for all of his employees.

The Dept. of Labor Services also requires the solicitation of minority firms (MWBE) for each trade. 3 minority firms should be solicited for each trade.

We at Metropolitan Realty Exemptions will guide you through the entire process up to the obtainment of the DLS approval letter.

Fresh Program

Program Eligibility
FRESH incentives are available to grocery store operators and to developers seeking to construct or renovate retail space that will be leased by a full service grocery store operator. Stores that benefit from the program must be located in an eligible area (see map on the FRESH website via the Links to Additional Information) and meet the prerequisites outlined below.

Financial IncentivesThe financial incentives are discretionary and available to eligible grocery store operators and developers through the New York City Industrial Development Agency (NYCIDA). These incentives include:

Real Estate Tax Reductions

  • Land tax abatement for 25 years equal to $500 multiplied by each full-time employee or part-time equivalent at time of application (or the full value of the land tax for projects located within Empire and Empowerment Zones)
  • Stabilization of building taxes based on pre-improvement assessed value for 25 years (benefit reduced in years 22 through 25)

Sales Tax Exemption

  • Exemption from the 8.875 percent sales tax on materials to construct, renovate or equip facilities

Mortgage Recording Tax Deferral

  • Deferral of mortgage recording tax relating to the project's financing, equal to 2.05 percent for mortgages of $500,000 or less, and 2.80 percent for mortgages greater than $500,000

Zoning Incentives
Zoning incentives are provided through the New York City Department of City Planning. Proposed grocery stores located within the FRESH zoning area are eligible as of right. (see map on the FRESH website via the Links to Additional Information for zoning area) These incentives include:

Additional Development Rights

  • One additional square foot of residential floor area in mixed-use buildings for every square foot provided for a grocery store, up to a 20,000 square foot limit

Reduction in Required Parking

  • No parking required for grocery stores up to 40,000 square feet in commercial districts that permit residential buildings with ground floor retail
  • First 15,000 square feet of grocery retail space exempt from parking in other Commercial and Light Manufacturing districts

Are you ready to file your tax abatements? Let's Go!