Future Tax Estimates Under 421-a Abatement and Room for Negotiation on Property Issue

[Augustine Chang]

I have a property that I am looking to buy, which is currently benefiting from a 421-a tax abatement. The selling agent informed us that the taxes are $97 per month for this year. For the 2024-2025 period, the taxes are estimated by the NY taxation office to increase to $117 per month starting in July. Additionally, there will be a 20% annual increase in taxes every year until 2029, at which point they are expected to stabilize at their maximum rate.

What would the "full potential" tax amount be in 2029? According to my calculations, using Brooklyn's property tax rate of 0.78%, the tax should be around $354 per month based on taxable value of the property, not the $716 estimated by the agent. This discrepancy makes me question the assumptions used in their calculations, such as the expected annual property value appreciation and the applicable tax rate.