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Exemption Administration Manual, Part 2: Multiple dwellings and urban renewal—Section 4.07 - RPTL Section 489: Multiple dwellings (various improvements)

Assessor Manuals

Section 4.07 - RPTL Section 489: Multiple dwellings (various improvements)

Exemption code(s)


Year originally enacted:


Related statutes:

Mult Dw L Articles 7-B and 7-C


If allowed by local option, property is:

  • wholly or partially exempt from taxes levied on any increase in assessed value resulting from eligible improvements carried out within certain time periods (see Eligibility requirements below), and
  • eligible for tax abatement in varying amounts depending on type of improvement. In addition, the property is entitled to a limited assessment, which is described under Calculation of exemption below. Such property is, however, liable for special ad valorem levies and special assessments.

The benefits authorized by RPTL §489, unless excluded by local law, apply to:

  1. alterations or improvements to private dwellings,
  2. conversion of a private dwelling to a multiple dwelling, and
  3. conversion of a multiple dwelling to a private dwelling, provided that the alteration, improvement, or conversion is aided by a government loan or subsidy.

Eligibility requirements

Ownership requirements:

Property must be owned by a private individual or organization.

Property location requirements:

Location requirements depend on type of property improvement. See Property use requirements below.

Property use requirements:

1. The following alterations and improvements are eligible for exemption and abatement in the following areas: 

Property use requirements
Eligible alterations and improvements Eligible areas
Alterations or improvements to eliminate fire or health hazards All cities
Asbestos abatement to the extent such abatement is required by federal, state, or local law Cities in which Multiple Dwelling Law applies (New York City)
Conversion of building or other structure to Class A multiple dwelling not used for single-room occupancy Cities in which Multiple Dwelling Law applies (New York City)
Energy-conservation alterations or improvements Cities in which Multiple Dwelling Law applies (New York City)
Historic preservation alterations or improvements to exterior walls Cities in which Multiple Dwelling Law applies (New York City)
Rehabilitation (substantial) of a Class A multiple dwelling or conversion of a building or other structure to a Class A multiple dwelling as part of a program to provide housing for low- or moderate-income households, provided that (1) the rehabilitation or conversion is aided financially by a government agency and (2) the property was a building or buildings conveyed by the city for the purpose of such rehabilitation or conversion Cities in which Multiple Dwelling Law applies (New York City)
Rehabilitation (moderate) of substantially occupied Class A multiple dwelling New York City

2. Property must not be a Class A or Class B multiple dwelling used in whole or in part for single-room occupancy, defined by Mult Dw L 4(16) as "the occupancy by one or two persons of a single room, or of two or more rooms which are joined together, separated from all other rooms within an apartment in a multiple dwelling, so that the occupant or occupants thereof reside separately and independently of the other occupants of the same apartment." This requirement applies regardless of the status or use of the building after the conversion, alteration, or improvement unless such work is carried out with the substantial assistance of grants, loans, or subsidies from any federal, state, or local agency (as specified under RPTL §489(17).

3. Property must be used for residential purposes. If the property is used in part for other purposes, the tax exemption and abatement must be adjusted to exclude the portion used for non-residential purposes.

4. A local law may require that property be located in an area approved for clearance, replanning, reconstruction, or neighborhood rehabilitation pursuant to Chapter 887 of the Laws of 1945, or in an area designated for studies, tests, demonstrations, and other activities for the prevention and elimination of slums and urban blight pursuant to Chapter 608 of the Laws of 1956, or in an area for which a preliminary or final plan has been approved pursuant to Chapter 688 of the Laws of 1957 or Chapter 924 of the Laws of 1958 or Chapter 971 of the Laws of 1960, or in an area for which an urban renewal plan or tests, studies, or demonstrations have been approved pursuant to Article 15 of the General Municipal Law. In addition, the dwelling must be certified by the project board for the area as a dwelling which is to be or has been approved in conformity with such replanning, reconstruction, neighborhood improvement, studies, tests, demonstrations, or plan.

5.In the case of alterations or improvements to eliminate fire or health hazards (including asbestos abatement), tax exemption and abatement does not apply to any portion of the property that increases the gross cubic content of the building.

6. Except for (1) multiple dwellings where units have been newly created by substantial rehabilitation of vacant buildings or conversion of nonresidential buildings,(2) multiple dwellings containing a total of 10,000 or more units which were developed as a planned community and are owned as two separate condominiums, or (3) multiple dwellings, buildings, and structures owned and operated by a mutual redevelopment company established under Article 5 of the Private Housing Finance Law, the assessed value of the property, including land, must not exceed $40,000 per dwelling unit at the time of the start of alterations or improvements.

7. In the case of an eligible improvement, when the improvement is accompanied by an increase in the building's floor area, a tax exemption, but not a tax abatement, applies in the additional floor area when the additional area is less than 50 percent of the completed building's floor area. In designated areas of Manhattan, the improvement also must be aided by a grant, loan or subsidy from a federal, state or local agency.

8. Except for (1) multiple dwellings, buildings and structures owned and  operated  either by  limited-profit housing companies established pursuant to article two  of  the  private  housing  finance  law   or   redevelopment   companies established pursuant to article five of the private housing finance law, or  a group of multiple dwellings that was developed as a planned  community  and  that  is  owned  as  two  separate condominiums containing a total of ten thousand or more dwelling units, any  multiple dwelling,  building  or  structure  that  is owned as a cooperative or a condominium that has an average assessed value per dwelling unit that exceeds the assessed value limitation shall only be eligible for exemption if the alterations or improvements were carried out with substantial government assistance.  The assessed value limitation for 2017  is $32,000 increased by the 2017 social security cost of living adjustment.  Each subsequent  year the previous year’s limitation shall be increased by the social security cost of living adjustment for that year, but the assessed value limitation shall not exceed $35,000.

Certification by state or local government:

The project board of the eligible area in which the property is located must certify that the dwelling is one which satisfies the requirements for that area (see Property use requirements above).

Required construction start date or other time requirement:

Cities in which Multiple Dwelling Law applies (currently applies only in New York City, based on the 2010 federal census): Conversion of residential units that are registered with the NYC Loft Board as an interim multiple dwelling": project must be completed by June 30, 2022. 

Alterations or improvements that (1) are undertaken by a housing development fund company organized pursuant to PHFL Article 11 and (2) are carried out with either (a) substantial financial assistance from a government agency or (b) in a property transferred from the city if the project is completed within seven years after the date of transfer: project must be completed within 60 months and by June 30, 2022. 

Where multiple alterations or improvements are undertaken in a planned community (as described in Property Use Requirements, paragraph f., above) and a separate application for benefits resulting from such alterations or improvements is made, all requirements concerning physical condition of and compliance with law by the multiple dwellings in such planned community will apply only upon completion of all such improvements or alterations, provided that such projects are completed within six years and prior to December 31, 2005.

All other projects: project must be completed within 30 months and by June 30, 2022. The local housing agency is authorized to grant an extension of the period of completion for any project carried out with substantial financial assistance from a government agency, provided that the alterations or improvements are completed within 60 months from commencement of construction.

Local option

Yes. Each city may choose whether or not to allow the tax exemption; if exemption is allowed, tax abatement is mandatory, except for floor space added to an existing building which is not eligible for abatements. The option must be exercised through adoption of a local law or ordinance, which may restrict the eligibility requirements, scope of exemption, and amount of benefits under this statute beyond the limits specified by state law.  In cities in which the Multiple Dwelling Law does apply (New York City), the option may be exercised at any time up to and including January 1, 2022.

Any local law or ordinance providing benefits under this exemption must also provide, with respect to a conversion, alteration or improvement for which application was made after January 30, 2013, that should such a project not be completed by the date of initial inspection by the Department of Housing and Preservation Development, the applicant must then pay two times the actual cost of any additional inspections necessary for verifying completion of the project.

The taxing jurisdiction has an additional option in its local law or ordinance to require the electronic filing of applications for this exemption.  

Note: The revocation of benefits granted to any multiple dwelling, building or structure does not exempt any dwelling unit therein from continued compliance with the requirements of this exemption, or of any local law or ordinance providing for such benefits.  

Limitation on exemption

Limitation on exemption by amount, duration, and taxing jurisdiction
General municipal taxes  School district taxes Special ad valorem tax Special assessments
1. Amount Yes* Yes* No exemption allowed No exemption allowed
2. Duration Yes** Yes** No exemption allowed No exemption allowed
3. Taxing Jurisdiction a. County or County Special Districts Ex** NA Tax Tax
b. City Ex** NA NA Tax
c. Town or Town Special District Ex** NA Tax Tax
d. Village  Ex** NA NA Tax
e. School District NA Ex** NA NA
Ex-Exempt     Tax-Taxable     NA-Not Applicable

* Both tax exemption and tax abatement are limited in amount and duration -- see Calculation of Exemption below.
** If allowed by local option.

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

See chart on next page.

Special ad valorem levies and special assessments:

No exemption allowed.

Coding of exemption on assessment roll

Coding of exemption on assessment roll
Code Description of alternative codes possible

Assessment roll section(s):

Taxable (RPS Section 1).

Note: This code should not be used to identify property that is exempt under any of the statutes listed under Similar exemptions below.

Filing requirements (owner or occupant of property)

Visit the website of the New York City Department of Finance. (See also Local option above).  

Reporting requirements (assessor)


Similar exemptions

See Chart IA and Chart IB.

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