The 421-a tax program was established in 1971 to boost construction in the city. According to the law, new construction of multiple units on a single vacant lot are eligible to be exempt from taxes if it contains 20% affordable units, and are not in the exclusion area. The tax exemption can be potentially extended up to 25 years. However, tax saving is supposed to be passed on to tenants as these units are supposed to be rent stabilized during the tax exemption period.
Currently, the program forgives $1.4 billion of property taxes each year. However, it has been found that nearly 2/3 of landlords in the program are not compliant with the rules as they have not registered their units as rent stabilized and therefore have not received the required certification under the program despite receiving the tax breaks. Under the city council’s new outline, landlords will have until January 5, 2018, to be approved for the program or their tax exemption will be suspended.
The 421-a tax program is just one program, from one city in the United States. Landlords across the country need to be aware of different Federal, State, and Local Program, Rules and Regulations in order to stay competitive and compliant with the law. The amount of knowledge one needs to know to be a successful landlord can seem overwhelming. That is why it is essential to have a property management system that keeps you organized and efficient. Property management software like RISSOFT’s Building Management Software has state of the art features that will save you time and money managing your property so that you can focus your energy where it needs to be.
This post is provided by RISSOFT Residential and Commercial Property Management Software, specializing in innovative and cutting-edge property management software for all 50 states. Request a demo or contact us today to receive more information.
Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.