NYC Affordability

New York’s FY2025 state budget, enacted April 20, 2024, replaced the long-running 421-a construction tax exemption with 485-x, also called Affordable Neighborhoods for New Yorkers (ANNY). Both programs give new residential buildings a property tax exemption in exchange for setting aside a share of units as income-restricted — but 485-x requires deeper affordability and locks it in for longer: exemptions can run up to 40 years (five more than 421-a’s typical term), and income-restricted units must stay affordable permanently rather than reverting to market rate once the exemption ends. Larger projects generally must set aside 20-25% of units as permanently affordable, weighted toward 60-80% AMI, with the specific split depending on project size and location.

Why it matters for buyers

For a condo buyer, a building’s tax exemption status directly affects monthly carrying cost — an abated building’s property tax line can be a small fraction of an otherwise-comparable non-abated building’s, at least until the exemption phases out or expires. If you’re evaluating a newer condo building, ask whether it carries a 421-a or 485-x exemption, what the current tax bill actually is versus the unabated projected bill, and when the exemption ends — see income needed to buy in NYC for how the property tax line factors into the affordability math, or run a specific building’s numbers on the Condo Affordability Calculator.