New York Property Owners Face Soaring Taxes as Long-standing Exemptions Expire
Thousands of New York City property owners and renters face soaring property taxes and maintenance fees as long-standing residential tax abatements expire through 2030.
Thousands of property owners and tenants in New York City are facing a sharp financial reality as long-standing tax breaks expire, leading to dramatic increases in property taxes and maintenance fees.
When Derek McKenzie moved into his Brooklyn apartment in 2022, his annual property tax bill was $140. This year, it surged to $7,600, and next year it is expected to reach $10,500. The dramatic spike stems from the expiration of a 15-year tax abatement on his Park Slope apartment. Now that the benefit has lapsed, McKenzie and his building neighbors must pay full property taxes, a situation confronting residents across thousands of other New York buildings.
Thousands of Buildings Facing Tax Cliffs
Across all five boroughs of New York, thousands of buildings are set to lose their property tax exemptions through 2030 and beyond. According to the New York City Department of Finance, about 4,100 buildings are affected. However, analysts utilizing alternative calculation methods estimate the figure is significantly higher. The Roebling Index, a real estate research and data platform, estimates that up to 4,800 privately owned residential buildings, cooperatives, and rental buildings will lose their tax breaks between 2023 and 2030 alone.
The Roebling analysis indicates that the gradual phase-out of these incentives will drive sharp tax increases on approximately 66,000 housing units by 2030. An additional 4,600 buildings, encompassing roughly 94,000 housing units, are projected to transition to full taxation between fiscal years 2031 and 2040. Renters will also feel the pressure alongside homeowners, as approximately 2,630 rental buildings face the expiration of tax arrangements signed before 2016.
"When a tax break expires, someone has to absorb the additional cost," said Corey Cohen, team manager at Compass and publisher of the Roebling Index. "Through rent increases where regulation and market conditions permit, a drop in the property owner's income, or over time, a decline in property value."
The Historical Context of Tax Abatements
New York's affordable housing crisis has remained a central political issue, prompting various proposals to freeze regulated rent increases and lower insurance costs for property owners. Yet, these measures do little to assist the thousands of New Yorkers entering the phase-out period of pre-2016 incentive programs. These decades-old programs granted property tax breaks to developers who built residential units, including affordable housing, to stimulate construction and meet surging housing demand.
Property tax exemptions typically last between 10 and 25 years, tapering off gradually toward the end of the period, often by 20% increments, until buildings are assessed at the full tax rate. For cooperative owners like Audrey Henry, who purchased her Harlem apartment in 2004, the looming tax cliff threatens monthly stability. Henry and her neighbors have organized petitions and appealed to local community boards, urging lawmakers to ease the tax burden.
"There are people here who after this year might no longer be able to afford to live here," said Henry, a widow caring for her 98-year-old mother and a college-aged daughter. "I hope I'm not one of them."
Selling an apartment facing an expiring tax abatement has also proven increasingly complex. A review of over 37,000 apartment sales across the city revealed that property value appreciation in areas nearing the end of tax benefits lagged behind areas with years remaining on their exemptions.
