Ever wonder why two similar NoMad condos can have very different monthly costs? The answer often sits inside the building’s tax abatement, a temporary reduction that lowers your real estate tax bill for a set number of years. If you are comparing new or recent NoMad buildings, understanding these abatements can help you avoid surprises and make a smarter offer. In this guide, you will learn what abatements are, how to read offering‑plan tax schedules, how to calculate your true monthlies, and what to plan for when the abatement phases out. Let’s dive in.
What a condo tax abatement is
A condo tax abatement is a time‑limited reduction in the property taxes assessed on a building. As an owner, you pay a share of the building’s tax bill, so the abatement lowers your monthly carrying cost for a defined period. This is different from a permanent exemption, which generally does not apply to most new condos.
In Manhattan, and in NoMad in particular, you will commonly encounter legacy 421‑a programs and later variants sometimes referred to as Affordable New York. These programs awarded multi‑year abatements to qualifying new construction. You may also see less common structures like J‑51 for rehabilitations or negotiated incentives such as PILOTs. The key point: programs and schedules differ by building, so you should never assume two NoMad condos have the same abatement timeline or phaseout.
Primary takeaway: verify the specific abatement program, the start date, and the expiration or phaseout schedule for the building you are considering.
How abatements show up in NoMad
Where to find the schedule
Start with the building’s offering plan, which should include a section titled Projected Real Estate Taxes or Estimated Real Estate Taxes. This table typically shows year‑by‑year taxes with the abatement applied, and sometimes a column for taxes without it. You can also review the NYC Department of Finance property tax bills, the certificate of occupancy, and recorded instruments in ACRIS to confirm the abatement’s issuance and terms.
Key labels in offering plans
Look for these items in the disclosure:
- Program name or statute reference, such as 421‑a or Affordable New York.
- The Projected Real Estate Taxes table, ideally with year‑by‑year figures through the abatement term and, if provided, post‑abatement years.
- Unit allocation method, which explains how the building’s tax bill is split among units. Common methods include percentage interest or square footage formulas.
- Sponsor assumptions, including estimates for assessed value changes, tax‑rate growth, and the start of the abatement period. These are projections, not guarantees.
- Notes on reassessment, tax class, or any potential adjustments by the Department of Finance.
How the schedule is structured
Abatement schedules vary. Some provide multiple years at a high abatement percentage with a gradual phase‑in of taxes. Others are front‑loaded and result in a noticeable jump when they expire. Many offering plans include separate columns for annual tax with abatement, annual tax without abatement, and the unit‑level share payable after allocation. Read each line carefully and confirm whether the figures are for the entire building or for your unit.
Read and verify the numbers
Avoid common mistakes
Confirm whether the table you are reading shows building totals or unit‑level amounts. Verify the first tax year covered, and understand when the abatement clock actually starts, which is often tied to the building’s certificate of occupancy or formal issuance of the exemption. Pay careful attention to footnotes and assumptions, since sponsors typically rely on estimates for assessed values and tax rates.
NoMad timing context
NoMad saw a wave of development after 2010, and many projects used incentives available at the time. That means two buildings on the same block could have very different remaining abatement terms. Some might be early in their schedule, while others could be nearing a phaseout. Your comparison should factor in where each building sits on its timeline.
Calculate your true monthlies
Your monthly carrying cost includes your share of real estate taxes, plus common charges or maintenance, mortgage principal and interest, and typical utilities and insurance. The abatement only affects the tax portion, so you should convert the offering plan’s annual tax projections into a monthly unit amount, then add the other components.
Use this simple method for a given year:
- Find the projected annual building tax for that year with the abatement applied in the offering plan.
- Find your unit’s allocation fraction, often shown as a percentage interest.
- Multiply building annual tax by the unit fraction to get the unit’s annual tax.
- Divide by 12 to estimate the unit’s monthly tax.
Illustrative example:
- Sponsor projection for Year 3: building tax with abatement equals 1,200,000 dollars.
- Unit fraction: 1.2 percent, or 0.012.
- Unit annual tax: 1,200,000 times 0.012 equals 14,400 dollars.
- Unit monthly tax: 14,400 divided by 12 equals 1,200 dollars per month.
Add your monthly common charges and your mortgage principal and interest to arrive at your total monthly carrying cost. This exercise helps you compare buildings on a like‑for‑like basis and also shows how your monthlies may evolve as the abatement phases out.
Model after the abatement
When the abatement winds down, your taxes can rise. Some offering plans provide a post‑abatement projection. If they do not, create your own estimate by removing the abatement and applying the sponsor’s growth assumptions for assessed value or tax rates. Ask your lender whether they will underwrite your loan using the current abated taxes or a higher post‑abatement figure, since this can impact your debt‑to‑income calculation.
Resale and valuation effects
Abated units often show lower monthlies than comparable condos without abatements, which can distort comparable sales analysis. If you are evaluating value, normalize the monthlies by modeling the taxes with and without the abatement. A long remaining abatement can be a selling point, while a short runway may reduce the future buyer pool if monthly costs are set to jump.
Timing matters. If the abatement expires within your expected ownership horizon, consider whether market prices or rents are likely to absorb a higher tax bill. Appraisers and lenders may adjust for future tax increases, especially near expiration. Property taxes may be deductible for federal tax purposes subject to current limits, so speak with a CPA to understand how any deduction may apply to you.
Documents and due diligence
Gather these documents to confirm the facts:
- Full offering plan and all exhibits, with emphasis on the Projected Real Estate Taxes section, allocation method, and any notes about incentives.
- Sponsor’s tax projection spreadsheet and the assumptions behind it.
- Certificate of occupancy and the date the abatement began, which is key to measuring the remaining term.
- Current and historical Department of Finance tax bills to confirm what is actually being billed.
- ACRIS or City Register records for any recorded abatement certificates, PILOT agreements, or related instruments.
- Condo bylaws and budget provisions related to tax allocation and how tax increases are handled.
- Title report to check for liens or obligations that could affect the building.
Verification steps:
- Confirm the abatement’s legal identifier, the approval date, and whether the Department of Finance has issued it as disclosed.
- Compare sponsor projections to recent tax bills and the building budget.
- Check whether the abatement depends on maintaining certain conditions, such as affordable units, and whether those conditions remain satisfied.
When to have an expert review:
- You are comparing buildings where abatements materially change monthlies.
- The abatement expires within your likely ownership window, often within five to ten years.
- Sponsor projections look optimistic, incomplete, or inconsistent with tax bills.
- The allocation method is unusual or unclear.
- There are hints of PILOTs or other negotiated incentives that require deeper review.
- Before finalizing your contract terms, since tax schedules can influence negotiation and mortgage qualification.
Red flags to watch
- No post‑abatement projection is provided.
- Allocation details are vague or inconsistent across sections of the offering plan.
- Abatement expiration is within three to five years and the sponsor does not address the impact.
- Language suggests the abatement depends on future actions or unresolved conditions.
- Department of Finance records do not match sponsor disclosures.
Quick buyer checklist
- Obtain the offering plan and find the Projected Real Estate Taxes table.
- Confirm the unit’s allocation method and compute unit‑level monthly tax for near‑term and post‑abatement years.
- Pull current and historical tax bills to confirm issuance and program name.
- Determine the abatement start date and scheduled expiration.
- Ask for supplemental schedules if post‑abatement taxes are not shown.
- Ask your lender whether they will use abated or post‑abatement taxes for qualification.
- If expiration is within your horizon or the numbers seem optimistic, request a formal review before you ratify your purchase.
Ready for a review?
If you love a NoMad condo but the tax abatement details feel murky, you are not alone. A clear read of the schedule can change how you compare units, set your offer strategy, and plan your financing. If you want a second set of eyes on the offering plan tax table and the building’s current bills, reach out to schedule a focused review with Darya Goldstein. You will leave with a clean, apples‑to‑apples monthly cost comparison and a plan for what happens when the abatement changes.
FAQs
How big can taxes jump when an abatement ends in NoMad condos?
- It varies. Some programs phase taxes up gradually, while others create a substantial single‑year increase. Use the building’s post‑abatement projection to quantify the specific impact.
Are sponsor tax projections reliable for NoMad condos?
- Treat them as estimates. Sponsors often rely on assumptions about assessments and rates. Compare projections to Department of Finance bills and have an independent recomputation done.
Do condo tax abatements transfer to a new owner in NYC?
- Yes. Abatements usually remain in place and transfer with the unit until the scheduled expiration, provided the building continues to meet program conditions.
How do lenders treat abated taxes in mortgage approvals?
- Policies differ. Some lenders use current abated taxes. Others underwrite using higher post‑abatement estimates. Ask your lender which figure they will apply to your debt‑to‑income ratio.
What should I verify before signing a contract on an abated NoMad condo?
- Confirm the program name, start and end dates, unit allocation, current billed taxes, and whether post‑abatement years are modeled. If the abatement expires within your ownership window, seek an expert review before you commit.
