On July 3, 2019, New York Gov. Andrew Cuomo signed Senate Bill 5554, providing various changes to the green roof tax abatement program including an extension to June 30, 2024.
The abatement
The green roof tax abatement provides a tax abatement of $5.23 per square foot of a green roof space, limited to a maximum abatement of $200,000. The legislation amends prior provisions that capped the abatement at the tax liability of the eligible building or the $200,000 maximum yearly abatement. Taxpayers may now apply the amount of the tax abatement exceeding total tax liability in any tax year to the tax liability in succeeding tax years. Eligible taxpayers must apply the excess abatement within five years of the tax year of the initial tax abatement.
The legislation also adds an “enhanced” tax abatement of $15 per square foot for green rooves located in certain community districts with a growth medium with a depth of at least four inches. An agency designated by the mayor will select the districts. The enhanced abatement is limited to $200,000 and has the same five-year carryforward period.
Finally, the legislation amends the definition of “green roof” for purposes of the abatement, removing the requirement for an insulation layer that is code compliant and adding a requirement for a filter or separation fabric.
Application and timing
In order to receive green roof tax abatements, taxpayers must file an application with the New York City Department of Buildings. The aggregate amount of tax abatements, including enhanced tax abatements, are allocated by the New York City Department of Finance on a pro rata basis among approved applicants.
Qualifying taxpayers must file an application for tax abatement no later than March 15 before the tax year, beginning July 1, for which the taxpayer is seeking the abatement. Accordingly, March 15, 2023 is the latest application date to request abatement for the 2024 tax year, the last scheduled year of the program.
Takeaways
The green roof tax abatement, originally $4.50 per square foot, was enacted in 2008 and later amended in 2013 to apply to tax years through June 30, 2019. Importantly, the abatement only applies to those cities with a population of at least 1,000,000, or solely for those taxpayers living within the five boroughs of New York City. Taxpayers unsure of eligibility or that would like more information on this tax abatement, or other available New York incentives, should speak to their credits and incentives tax advisers with questions.
