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Condo at Brooklyn Point with a running tax abatement that saves the owner thousands in carrying costs per year (Extell Development)
From Get To Know
Six tax credits every NYC homebuyer needs to know + 20 NYC listings with 421-A tax abatements
By Cait Etherington
Thursday, August 19, 2021
Buying and owning a home may be expensive, but there are a number of tax advantages associated with home ownership. While some tax credits are available to all homeowners, others depend on the status or location of the property or nature of the home upgrade. This article offers a breakdown of the six most common tax credits available to homeowners in New York City.
State and Local Tax (SALT) Credit
If you read the news, you likely already know about the SALT (state and local tax) deduction, and the fact that in 2018, the deduction was capped at $10,000. For people living in states with lower taxes, the change had little or no impact. In New York City, where property taxes are often well about $10,000 annually, capping the SALT tax has proven controversial. Still, if you itemize personal deductions, you can deduct up to $10,000 of your state and local taxes annually. Applicable taxes include the taxes you pay on your property and any additional taxes paid as a shareholder in a coop. One caveat is that you can either deduct state and local real estate and personal property taxes and income taxes or general sales taxes but not both income and general sales taxes.Home Mortgage Interest Tax Credit
Home mortgage interest refers to any interest you pay on a loan you’ve taken out for your home whether it is a primary or secondary home. Again, since 2018, this tax credit isn’t as advantageous as it once was, but it still does exist. Owners who purchased a home before 2018 can deduct mortgage interest on loans valued at up to $1 million. Owners who have purchased a home since 2018 can deduct home mortgage interest on the first $750,000 of their debt.Home Office Tax Credit
Even if you’re now working from home, don’t assume you can claim the home office credit. The home office tax credit is only available to people who are self-employed (notably, this includes salaried employees who also work as freelancers or run a business on the side).If you are eligible, there are also several important IRS regulations that you must follow. First, you have to be using part of your home for the “regular and exclusive use” of your business. Second, the space must be your principal place of business. Finally, no one is permitted to write off their entire home for business purposes. Instead, you can write off part of your home using the IRS’s simplified or regular calculation. Under the simplified method, you get a standard deduction of $5 per square foot of home used for business purposes (up to 300 square feet). The regular deduction allows you to deduct a percentage of your home instead.
214 West 11th Street in the Greenwich Village Historic District
Tax Credits for Restoring Historic Properties
If your home happens to be listed in the State or National Register of Historic Places or is located in one of New York City’s State historic districts, you may qualify for one or more tax credits.The Federal Historic Rehabilitation Tax Credit program offers a 20 percent federal income tax credit for owners of properties listed on the National Register of Historic Places but only if these properties are income-producing. Property owners of homes on the list may also be eligible for a credit if they rehabilitate their property and the rehabilitation is approved by the Secretary of the Interior’s Standards for Rehabilitation and is approved by the National Park Service.
At the state level, buildings listed in the State or National Register of Historic Places or located in a listed historic district may be eligible for the New York State Historic Homeowner Tax Credit Program, which covers 20% of qualified rehabilitation costs of owner-occupied homes (to a maximum of $50,000). Learn more on the Preservation League of NYS website.
Tax Credits for Going Green
If you are a homeowner and thinking about installing a green roof, solar panels, or another green energy solution, the tax breaks could be significant. The city, state, and federal government all offer incentives for going green.- City Credits: Depending on when you installed your solar energy system, you may still be eligible for a city credit. New York City also offers a one-time tax abatement for the installation of green roots (i.e., roofs with vegetation that absorb rainwater, provide insulation, and counter the “heat island effect”). The current program offers $4.50 per square foot of green roof space (up to $100,000). In condo buildings, the abatement is distributed amongst the individual units (visit the NYC Department of Finance for more details).
- State Credits: As part of the state’s incentive to install solar systems, homeowners can claim a credit for 25% of the cost of the installation (up to $5,000).
- Federal Credits: The federal government offers a tax incentive for installing qualifying renewable home energy systems, including the cost of installing solar electric and solar water heating systems, as well as small wind-energy properties and geothermal heat pumps. If you want to take advantage of this tax credit, it is important to do so sooner rather than later. The program, which was recently extended, is scheduled to phase out by the end of 2023. For now, the following credits are still available:
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2023
- 22% for systems placed in service after 12/31/2022 and before 01/01/2024
Tax Credits for Home Improvements Made for Medical Reasons
Finally, there are a number of home-related tax credits available to homeowners who need to make capital improvements for medical reasons. These reasons include but are not restricted to:- Constructing an entrance or exit ramp
- Widening doorways
- Installing railings or support bars in bathrooms
- Adding handrails or support bars in other parts of the home
- Lowering or modifying kitchen cabinets and equipment
As with other tax credits, the IRS offers this one with a specific caveat. If the improvement made for medical reasons increases the value of the home, you can claim part of the improvement as a medical expense. On the other hand, if the improvement doesn’t increase the value of your home, the entire cost can be included as a medical expense. As it turns out, most improvements made for medical reasons (e.g., installing ramps, widening doorways, installing grab bars, and lowering and modifying kitchen counters) don’t add to the value of the home so in most cases, the entire cost can be claimed.
Image via Pixabay - stevebp
Listings with Tax Abatements
Graceline Court via Brown Harris Stevens
From the Listing: Large one bedroom home masterfully designed and renovated with over ten years left on the tax abatement. This beautiful turnkey unit has been completely reimagined and reconfigured with attention to every detail including a new heating and cooling system. Enter into a generous foyer that leads to a beautiful well-appointed kitchen that features Bosch black stainless steel appliances, Ultracraft cabinetry and Grohe fixtures and Caesarstone countertops with Pinnacle Nero Marble backsplash. The spacious living/dining area is perfect for living as well as entertaining and has northern and eastern exposures. See floor plan and full details here.
The Rennie via Brown Harris Stevens
From the Listing: Settle in to the Harlem Beat with this chic and smartly designed sunny two bedroom facing a quiet tree-lined street. Gorgeous floor-to-ceilings windows throughout bring in the classic Harlem townhouse views. The true galley kitchen features modern quartz countertops with a mosaic glass tile backsplash. A suite of stainless steel appliances by Fisher & Paykel are framed by wood grain lower cabinetry paired with white, high-gloss upper cabinetry. Sleek bathroom finishes include Florentine Carrara porcelain wall tile and Grigio Medio porcelain tile floors. A recessed medicine cabinet and wood vanity with integrated sink complete the space. Tech-smart details and environmentally-conscious design set the tone for innovative living. The Rennie's rare 421a tax abatement provides incredible tax savings for the next 25 years. See floor plan and full details here.
540West via Douglas Elliman
From the Listing: Residence 307S is a bright southern exposure one-bedroom, one-bath home featuring white oak flooring throughout the home. The galley kitchen features quartz countertops, Bertazzoni gas range and oven,-quiet dishwasher, and a Liebherr refrigerator and Italian cabinetry. The bedroom is nicely proportioned, the bathroom has a deep soaking tub, handheld and rain-head shower fixtures as well as an elegant Italian floating vanity. The heat and AC are individually controlled and there is a washer and dryer in the apartment. There is a 421a tax abatement which expires on June 30, 2027. See floor plan and full details here.
Brooklyn Point via Extell
From the listing: BROOKLYN POINT OFFERS ONE OF THE LAST 25-YEAR TAX ABATEMENTS AVAILABLE IN NEW YORK CITY. A pristine residence nestled in the prestigious Brooklyn Point development, this stunning 1-bedroom, 1-bathroom home is a portrait of contemporary Brooklyn living. Features of this 703 sq. ft. home include beautiful wide plank stained oak floors, floor-to-ceiling windows with southern exposure and panoramic views of Brooklyn, an in-home washer/dryer, and a harmonious dark wood color palette with brushed nickel fixtures and finishes designed to accentuate space and natural light. A welcoming foyer adorned with a walk-in coat closet flows into a spacious open-concept living room, dining room, and kitchen saturated with natural light. See floor plan and full details here.
The Lindley via Brown Harris Stevens
From the Listing: Moments from The New York Public Library, Bryant Park and Grand Central Station, the newly built Lindley conveniently and centrally located in Murray Hill. There is a 421-A tax abatement in place through 2029, which is rare to find in the city any more. Residence 9B is a modern 1-bed, 1-bath with west-facing views and soaring 10-foot ceilings. Featured with Chef's kitchen, equipped with ample New York Carrera quartz countertops with smoky gray quartz backsplashes, a Sub-Zero refrigerator, a fully vented four-burner Wolf range and oven, and a large Elkay stainless steel sink. The apt has Walk-in closet and electronic black out shades. A sleek thermostatic controlled Grohe rain shower with a high-pressure hand spray faucet. See floor plan and full details here.
The Rushmore via Nest Seekers
From the Listing: Located at Riverside and 64th Street with forever unobstructed views of the Hudson River and lush green parks, The Rushmore offers a lifestyle as extravagant as its surroundings. The lavish interiors of its two soaring towers are complete with Miele, Viking, Sub Zero, and Waterworks fixtures, and your choice of different kitchen and bathroom finishes to make your home your own. 421-A tax abatement. See floor plan and full details here.
115 Norfolk Street via Living Real Estate Group
From the Listing: Unit #501 offers a warm and welcoming abode wrapped in a highly stylized aesthetic. Filled with natural light, subtle canted angles, polished concrete and wide-open spaces, it is sure to delight tenants and guests alike. Upon entering the unit, one is greeted immediately by a spacious living/dining area, complete with storage closet, cozy breakfast nook, and additional decorative nook leading to the master bedroom. An abundance of light emitting from the two windows reflects off the white walls, smooth ceiling and floors, and wall-to-wall kitchen cupboards. The building enjoys central air and heating, a 421A tax abatement through 2022, and also features an outdoor lounge and a roof deck. Residents also enjoy access to a virtual doorman, bike room and parking garage. See floor plan and full details here.
One Strivers Row via Douglas Elliman
From the Listing: Offered is a 1,600+/- square foot, 3 bedroom, 2.5 bathroom unit boasting 9 foot, 1 inch ceilings, floor to ceiling windows, a working gas fireplace and a private terrace situated on the 5th floor of a boutique, 14 unit, keyed elevator market-rate condominium with only one other unit on the floor. The living room features a gas working fireplace and east facing floor to ceiling windows having direct views of historic Strivers Row. The open kitchen, designed with a huge island, features high-end stainless steel appliances, a wine fridge and a vented range hood. The building offers a virtual doorman, a package room, a keyed elevator, and a common roof top terrace on the newly renovated roof. Full 421a tax abatement in force through 2029. See floor plan and full details here.
1400 on Fifth via R New York
From the Listing: 1400 5th Avenue was one of the first green buildings in NYC. This corner, sun-filled home offers amazing light and views. The sprawling condo encompasses three huge bedrooms when you walk in on the left wing of the home, and a corner sun-filled living room on the right wing of the home. There is tons of closet space, central air conditioning and heat, and views of 5th Avenue. The building has a 421-A tax abatement. See floor plan and full details here.
325 Lex via Douglas Elliman
From the Listing: A true gem, this spacious, east-facing one-bedroom offers an open kitchen with ample counter space, luxurious finishes and opulent elegance! From the wide plank walnut floors adding the perfect touch of warmth to built-out closets, there are top-of-the-line finishes throughout the home. The expansive living room will easily accommodate a dining set, and features the open, fully integrated kitchen. The spacious spa-like bathroom features Calcutta marble tile, walnut vanity and a deep soaking tub with a rain showerhead. In-unit Bosch washer and dryer makes life easy. A 421a tax abatement in place until June 30th, 2022. See floor plan and full details here.
One Manhattan Square via Corcoran
From the listing: ONE MANHATTAN SQUARE OFFERS ONE OF THE LAST 20-YEAR TAX ABATEMENTS AVAILABLE IN NEW YORK CITY. Residence 30C is a 695-square-foot one-bedroom, one-bathroom with 12-foot ceilings, an open gourmet kitchen, and breakfast bar. This residence features imported stone and custom finishes, premium Miele appliance package, 5" wide stained oak flooring, master bath with custom wood cabinetry, marble tile walls and mosaic floors with radiant heat, under-mount Wetstyle sink with glass vanity top and Dornbracht polished chrome faucets and a washer and dryer. See floor plan and full details here.
99 Morningside Avenue via Brown Harris Stevens
From the Listing: Offering incredible space, a thoughtful layout and a park adjacent location, unit 4A is priced to sell! The elevated great room offers two large windows that anchor the space and let the south facing light shine in. The generous king sized primary bedroom equipped with a spacious walk in closet, will allow for a comfortable lifestyle for years to come. The separate kitchen is located next to a spacious closet that can easily function as an over-sized pantry. The kitchen comes graciously supplied with striking finishes and appliances. Every home enjoys the coveted low-tax benefit of a 15-year 421a tax abatement.
See floor plan and full details here.
Centurion via Corcoran
From the Listing: The Centurion is the first ground up residential condominium in New York City designed by I.M. Pei, internationally-recognized Pritzker-prize winning architect. Apartment 5C is a generously-proportioned one-bedroom residence with a bright, southern exposure overlooking the historic Merchants' Row houses along 56th Street. The sunny, spacious living / dining room and adjacent primary bedroom feature teak floors and full floor-to-ceiling, sound-insulated windows. The kitchen has custom natural-walnut cabinetry, a solid clear glass countertop, glass tile backsplash, and premium appliances. Enjoy the convenience of generous closet space, and a Bosch Axxis washer/dryer. The building has attractive common charges and a 421A tax abatement. See floor plan and full details here.
One West End via Douglas Elliman
From the Listing: One West End is a sculptural glass residential tower with exterior Architecture by Pelli Clarke, interiors designed by Jeffrey Beers, amazing amenities, and a 20-year 421A tax abatement. This extraordinary one-bedroom, one and half-bath residence has elegant walnut door with two walk-in closets and brand newspaper box greet you as you enter this remarkable floor-to-ceiling windows and custom finishes throughout. A generous rectangular living room faces West End Ave is filled with flattering natural light, and a custom Scavolini kitchen designed by Jeffery Beers for One West End features Dornbracht fixtures, walnut cabinets in a champagne finish with matte glass panels, and Vagli Fine Vein marble on the waterfall edge countertops and backsplash. See floor plan and full details here.
The Lenox via Christie's International Real Estate
From the Listing: Upgrade your surroundings with space and style in this exquisitely designed, triple-mint corner duplex penthouse. Featuring over 2,000 square feet of living space plus a massive private roof terrace, each level commands panoramic skyline views of the Empire State Building, Chrysler Building and Central Park. As you enter the foyer of the apartment, you pass an architectural staircase leading downstairs to the bedroom level and upstairs to your private roof deck. The upgraded kitchen was designed with the serious cook in mind: an open layout, Sub-Zero refrigerator and built-in double Sub-Zero wine fridges; Gaggenau oven, five-burner gas Miele cooktop, separate Miele convection oven/microwave, dishwasher and stacked washer/dryer. There is a 421-A tax abatement in place until 2033.
See floor plan and full details here.
Adagio via Evans Real Estate New York
From the Listing: Welcome home to this fantastic high end loft 3-bedroom, 2.5-bath residence located in the heart of Manhattan in thriving Lincoln Square neighborhood. This beautiful and luxury home will impress you with its dramatic high 11'4'' ceilings, smart layout, luxury finishes, top of the line appliances and light-filled floor-to-ceiling windows. 421a tax abatement. See floor plan and full details here.
21W20 via Brown Harris Stevens
From the Listing: This stunning, near-mint condition 2-bedroom 2-bathroom apartment occupies a full-floor in a boutique, designer doorman building in prime and coveted Flatiron area. Residence 5 at 21 West 20th Street is the pinnacle of luxury living with a vast array of high-end finishes, modern conveniences throughout, and low taxes thanks to a 421a abatement in place until July 2023. Enter directly off of the elevator and be drawn toward the open living area with enormous floor-to-ceiling windows and picturesque vistas of West 20th Street and the gorgeous prewar architecture across the street. The living/dining area has been outfitted with an elaborate array of built-ins that provide an abundance of storage space as well as a murphy bed that has been thoughtfully concealed in the entertainment center. An immaculate chef's eat-in kitchen has seen minimal use and is clad in a beautiful mix of white oak and stainless steel custom cabinetry, olive marone marble countertops and a stainless steel backsplash. See floor plan and full details here.
160 East 22nd Street via Compass
From the Listing: Located in arguably one of the most desirable parts of Downtown Manhattan on the charming treed streets of Gramercy, about 450 feet from Gramercy Park, this mint 2-bedroom 2-bathroom home over 1,200 square feet in size, boasts northern and southern exposures and nearly 10-foot-high ceilings, this home is bathed in light all day. Enter via a gracious foyer with a large entry closet and a washer/dryer. The apartment is outfitted with 5-inch white oak floors and features a north-facing almost 20-foot-long great room with an open chef's kitchen boasting gleaming stone counters and designer soft-close cabinetry, a large island perfect for entertaining, Sub-Zero refrigerator, Miele gas range and oven, Miele dishwasher, and a wine cooler. The property has a 421-A 10-year benefit issued in 2012 and will expire on 7/1/2022. See floor plan and full details here.
Two Waterline Square via Corcoran
From the Listing: 20-YEAR, 421a TAX ABATEMENT. This one-bedroom, one-and-a-half bathroom residence at Waterline Square features floor-to-ceiling windows providing open views to the north. Hudson River views from the living/dining room and bedroom give rise to a serene setting. The bedroom features a generous walk-in closet and a spacious en-suite five-fixture bathroom. A fully-vented washer/dryer is conveniently located in the front hall. The collaborative design firm of Yabu Pushelberg honors the pride and scale of the exterior with interior choices predicated on permanence. See floor plan and full details here.
Reade57 via Brown Harris Stevens
From the Listing: This split-bedroom home features an open chef's kitchen with white lacquer cabinetry, stainless steel Bosch appliances, Liebherr refrigerator, garbage disposal and breakfast bar for easy entertaining. There are oversized, floor-to-ceiling windows, facing west and south which provide the apartment with sunlight all day. The primary bedroom features a large walk-in closet and en suite bath trimmed in marble, limestone and walnut and has an oversized glass stall shower. There is a also a half bath and large coat closet located just off the entryway, a washer and dryer, and an additional bedroom with an ensuite bath, complete with soaking tub. This mint home also has wide-plank teak flooring, custom shades, exposed brick, custom wall paper and central heating and cooling system.The building benefits from a 421-a tax abatement through 2023. See floor plan and full details here.
From the Listing: This Spectacular, never lived in, triple mint, spacious 2 bed/2.5bath home has Western and Southern exposures with oversized windows and open views of The Empire State Building, Chrysler Building, and Midtown Manhattan. Upon entering, you are greeted with an open chef’s kitchen with Gaggenau appliances, watermark fixtures, gold and reiss cabinetry, white glass countertops and backsplash. The apartment features 11 foot ceilings with white oak hardwood floors throughout, abundant closets, and a Bosch washer/dryer. This apartment has incredibly low Common Charges due to the 14-year 421A tax abatement.
See floor plan and full details here.
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Contributing Writer
Cait Etherington
Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.
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