Buyers at Extell’s One57 set to receive a 94% tax break

State law granted developer special use of 421a tax abatement
July 12, 2013 12:30PM

At Extell Development’s white-glove One57 condominium development — where asking prices have reached an astronomical $10,500 per square foot — buyers are set to receive a 94 percent discount on annual real estate taxes, the New York Times reported, citing a review of the offering plans of some of the city’s priciest new projects.

At the Alexico Group’s 56 Leonard Street, for example, the tax break is 76 percent. Because the developer laid the foundation before a 2008 deadline, they were eligible to apply for a 10-year tax abatement under the 421a program. This means that the buyer of a penthouse that recently went into contract for $47 million will pay just $33,000 per year for the first two years in taxes, which will progressively increase through the remaining eight years.

In the case of One57, however, its location on West 57th Street would normally make it ineligible for the abatement. But in January, the state legislature passed a housing bill that included an exemption for the project, as well as other high-end residential projects such as Larry Silverstein’s 30 Park Place and Joseph Sitt’s 516 Fifth Avenue.

If the city gives a nod to the abatement, the buyer of One57’s top penthouse – which is under contract for north of $90 million – will pay an annual tax bill of under $18,000, a sum more typical for the buyer of a $3 million apartment. [NYT]  – Hiten Samtani