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Updates on the MCI Tax Abatement Program

As explained in the article, "Increasing Your Bottom line- MCI Tax Abatement Program" by Martin Heistein, Esq., from Belkin, Burden, Wenig & Goldman, when owners apply to DHCR for Major Capital Improvement (MCI) rent increases, it is important to remember that there is another financial incentive available to owners - a property tax credit (also referred to as an “abatement”) from the City of New York.

This is a benefit that an increasing number of owners are obtaining as awareness grows. While there is no deadline for filing with the City’s Department of Finance (DOF), owners are required to submit an application no later than May 15th prior to the fiscal year (FY) in which the owner wants the one-time property tax credit to apply. For FY 2017, which runs from July 1, 2016 to June 30, 2017, DOF approved 330 applications, totaling $7.6 million in property tax credits for owners.

Applications are currently being processed by DOF for property tax credits which will take effect for FY 2018 (July 1, 2017 to June 30, 2018). As of December 31st, DOF had approved 243 applications worth $5.5 million for FY 2018. There are still several months before the deadline to file for FY 2018. To be eligible for an MCI property tax credit for FY 2018, owners must apply to DOF later than May 15, 2017. An application received by DOF after May 15th of this year will result in the tax credits taking effect the following fiscal year.

DOF has reported that a significant number of applications (37) have been denied so far this year because they related to MCI orders that were issued by DHCR prior to June 15, 2015, the date of the enactment of the Rent Act of 2015. However, owners should understand that while MCI orders which pre-date the law are NOT eligible, owners who receive MCI orders after that date can apply for the MCI tax credit at any time after DHCR issues its order (there is no expiration of eligibility).

If you received an MCI order after June 15, 2015, and you have not already applied for and received an MCI tax credit from DOF, you can still do so by applying through the DOF website at http://on.nyc.gov/1XnZCaY.
If you have any questions, please contact RSA at (212) 214-9200.

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