tax abatement

The formula is simple, whatever is normal (or average) for monthly expenses on an apartment of equal size is your base.
Then whatever formula you decide to figure, what is the "extra" let's say a round number $1000 per month worth in a mortgage? That extra your paying per month should come off the total sale price you need to mortgage.
Now in a low interest environment in can be devasting.
$1000 per month or 12K per year represents how much mortgage you would pay off otherwise?

In any case, I personally valued every $1000 per month as 250K on the sale price of a place. THat was when interest rates where 5%.

Thing is, when all these new developments in 10 years hit the proverbial fan, will our lovely govt or local government pass some extensions to these putzs so as not to decimate the market in like 2018?

That's what this current fiasco has taught me. You cant count any rules anymore.
Those who save, or those who have forethought are not rewarded and actually ultimately punished.
It's been quite a life lesson the last 3 years.

Not all 421a abatements are the same. Our Harlem condo has a 25 year tax abatement. (When it expires it will likely be our children's problem). Anyway the tax 25 years from now will be partly based on local rents. So if taxes are high then Harlem will have to have gentrified to the point where its similar to UWS otherwise taxes will be relatively low.

the 25s are different and I should have been specific to manahattan below 96th street. (where there are no 25 year abatements)

yes harlembuyer. you are screwing your kids. when they will be comparing your bldg, they will be comparing rents not of the 40's,50's,60's buildings, but of the ones built during similar times. these unregulated, inflated prices will cause your taxes to be sky high. what you don't realize is that noone will be willing to pay those prices for more then a year or two before find a similar priced apartment in a better neighborhood.

I would think NSP 1 is already seeing some of its taxes reset higher already

freezer, I think it's a lot more unclear than what someone like ab_11218 would have you think. Let's be clear: this can only have a negative impact. Quantifying it is the hard part, especially when there's still so much confusion around the actual numbers. Take a look at this thread to get a better sense:

http://streeteasy.com/nyc/talk/discussion/21705-15-versus-25-year-tax-abatement

>what will happen to the value of a condo when these abatements expire and the monthlies pretty much double?
Ultimately it's going to be worth what it's competing with.
Whether there are "new" new developments, you have to compete with their "newness" and their lower monthlies because of their fresh abatements, or a the time it expires average monthlies are (let's say 10 years from now) $3 per sq ft but your unabated place is now averaging $4 per sq ft, etc.

>is there a formula to figure out a 500k condo will be worth xxx when the abatement expires? thanks in advance
It's hardly the most important question. What will tax rates/laws be at this time? What will interest rates be at this time? A bubble? Duri

ng a crash? Inflation rate?

The abatement is clearly a negative when you go to sell at the end of your abatement regardless.
How did you invest those abated taxes you didnt pay during the period will be more important.

thanks for the great feedback, the tax base in nyc for condo does need to change and hopefully it will

Some of my worst fears involve taking tax advice from bjw.

Well I can offer an example of an apartment that I was considering buying.

It was in the east village which I didnt like, and it had very high monthlies as it was in year 8 of a 10 year abatement.

416 east 11th st phA
http://streeteasy.com/nyc/sale/567457-condo-416-east-11th-street-east-village-new-york

1300 square feet interior plus 1000 exterior concrete deck.
To complicate matters a little, the 3rd bedroom was converted from the storage room, a part of the outdoor space. This gave you an interior room and bathroom in the deck space and for me would have gladly accepted with no C/O.

Anyway,according to the offering plan, in 2001/2002 went for $1,100,000 (pg66 condo dec block 438 lot 1115)

Sold March 2006 for $1,849,000 about halfway through the abatement.

When I saw it in 2010, I did my research and as high as the taxes were realized it wasnt over, there was a last hike coming!
Anyway I offered 1.4 and it did sell for $1,515,000 in March 2011.

Im sure one of the stats afficionados could put this up against some indexes and determine the effects?

How about comparing to the A building?
421 East 13th PHD another apartment I also saw.
http://streeteasy.com/nyc/sale/463240-condo-425-east-13th-street-east-village-new-york

July 2010 for $1.9m
smaller at 1200 sqft (and trust me it was smaller than that live. And half the exterior square feet.

So 1 less bedroom and bath but legally the same. Half the outdoor space but the common roof has a pool.

Common charges are close but taxes because of the different period in their respective abatements a $1500 difference a month.

So 416 east 11th st pha Sold 3/11 for $1,515,000
421 east 13th st phd Sold 7/10 for $1,900,000

An imperfect but an example worth a look of how the end of a tax abatement affects.