Effective Date of J-51 Tax Abatement Offset

Landlord asked the DHCR when J-51 tax abatement offsets against MCI increases would take effect. In an opinion letter, the DHCR stated that the effective date of the J-51 tax abatement offset to be applied against MCI increases is either the effective date of the DRA's order granting the MCI increases for items cited in the J-51 certificate of eligibility or the date that the tax abatement goes into effect, whichever is later. The DHCR also noted that, for rent-stabilized apartments, the offset of J-51 benefits applied only to work started after June 28, 1988. Also, for rent-stabilized apartments, landlords don't need to file a rent restoration application to collect the unreduced rent at the end of the tax abatement period. For rent-controlled apartments, landlords must file an Owner Restoration application at the end of the tax abatement period to collect the unreduced rent. There are no DHCR Operational Bulletins on J-51 tax abatement offsets, but the DHCR Fact Sheet No. 11 on MCIs contains some information on the J-51 offset allowance.

DHCR Opin. Ltr. by Charles Goldstein (12/3/99) [2-pg. doc.]