What is the J-51 Reform (J‑51 R) Program?

New York City’s revamped J‑51 Reform (J‑51 R) program is one of the most valuable tools for multifamily building owners. By offering long-term property tax savings on eligible renovations, it makes upgrading your building more affordable while boosting its value.

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What is the J-51 Reform Program?

The J‑51 R program is the replacement for the original J‑51. It is a tax incentive program that provides an as‑of‑right property tax abatement for eligible renovations on Class A multiple dwellings, including certain rental buildings, co‑ops, and condos in New York City. The program applies to projects with work completed after June 29, 2022, and on or before June 29, 2026.

In plain terms, if you own a building and complete approved improvements (like modernizing plumbing or electrical systems, replacing roofs, repairing façades, or upgrading energy systems) you can reduce your property taxes for years. This makes it more affordable to invest in your property, maintain or increase its value, and meet current building and energy standards.

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Who Is Eligible?

Not every renovation or building automatically qualifies for J‑51 R. Here’s a simple breakdown who is eligible for this program:

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‍Eligible Construction means improvements to your building that:

• Must be on HPD’s certified reasonable cost schedule.
• Cost at least $1,500 per unit.
• Completed after June 29, 2022, and before June 30, 2026 (and within 30 months of starting).
• Cannot add extra building space.

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‍Eligible Rental Buildings include Class A multiple dwellings that:

• Are all rental units (not a hotel).
• Meet one of these:
  
  • At least 50% of units are rent-regulated and registered with DHCR.
  • Owned by a Mitchell-Lama limited profit housing or redevelopment company.
  • Receive substantial government assistance.

Some units must stay rent-stabilized for the length of the J‑51 R benefit, and landlords must waive MCI rent increases for the eligible work.
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Eligible Homeownership Buildings include Class A multiple dwellings that:

• Are condos or co-ops (not hotels).
• Have an average assessed value of $45,000 or less per unit.

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Eligible Regulated Homeownership Buildings include:

• Buildings owned by a Mitchell-Lama mutual housing company.
• Buildings owned by a mutual redevelopment company.

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How the Tax Benefit Works

J‑51 R provides a property tax abatement for eligible renovations, meaning your building’s property taxes are reduced for a set number of years based on the cost of improvements.

• The abatement is calculated as a percentage of the certified cost of the work.
• It typically applies year after year for multiple years, giving long-term savings.
• The more eligible improvements you make, the larger the potential tax reduction.

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Because eligibility and compliance requirements are detailed, owners should review official guidance and consult with tax professionals or housing counsel before proceeding. For full eligibility rules and application details, you can check HPD’s page here: NYC HPD J‑51 R Program.

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Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.