T
he clock is ticking for property owners hoping to take advantage of the newly revived J-51 tax break. Last week, the City Council reinstated the program, offering a significant abatement on major building renovations over 20 years. The annual break can't exceed 8.33 percent of renovation costs, and improvements must be completed between June 29, 2022, and June 30, 2026.

    Building owners can only apply for the tax break after work is finished, while those with already completed projects have four months to apply once the J-51 legislation becomes law. The Department of Housing Preservation and Development will release a "certified reasonable cost schedule" detailing what improvements qualify for the abatement and the maximum costs allowed.

    The new program has restrictions on eligibility, including rental buildings that must be at least 50 percent affordable or part of the state's Mitchell-Lama program. Condos and co-ops must have an assessed valuation under $45,000 per unit to qualify. Daniel Bernstein notes that the legislation threatens penalties, including jail time, for violating the program's requirements.

    Ben Williams, an attorney with Rosenberg & Estis, warns that owners may face a scramble to meet the deadline, especially since they don't yet know what improvements will be eligible. The revival of the tax break could be a deciding factor for owners on the fence about renovating, but the restrictions and enforcement measures have raised concerns among industry experts.