After a successful decade, New York City’s Property Tax Abatement for Photovoltaic (PV) Equipment Expenditures Program is drawing to a close on January 1, 2019.
The program, which is run by the NYC Department of Buildings, allows homeowners to recoup 5% of eligible solar system expenditures through reduced property taxes for the next four years.
If you’ve been thinking about going solar, now’s the the perfect time to take advantage of the program’s great savings!
New York has some of the most progressive energy goals in the country, and the Big Apple is no exception.
While the Residential Solar Tax Credit is available to the whole state, only New York City residents can take advantage of the solar property tax abatement.
Though costs are falling, going solar in the city has historically been more expensive due to the complexity of building sites and the NYC Department of Buildings’ stringent codes. The property tax abatement program, which was enacted in 2008, hopes to specifically encourage city residents to install solar systems.
It’s just one way the city is attempting to lower carbon emissions and foster the growth of renewable energy sources.
What is a Property Tax Abatement?
A property tax abatement is a reduction of a homeowner’s property taxes granted by a government agency.
A homeowner’s property taxes will often rise after installing solar due to the increase in home value.A property tax abatement can thus reduce the new tax amount to roughly pre-installation property tax levels.
If you’re familiar with income tax credits, property tax abatements operate in much the same way. Better yet, homeowners can take advantage of both the Federal Income Tax Credit and NYC’s Property Tax Abatement, in addition to any other local incentives they’re eligible for.
NYC Solar Tax Abatement Program Details
New York City’s property tax abatement allows residents who install solar systems before January 1, 2019 to deduct an annual 5% off of system expenditures for the next four years.
Eligible system expenditures include:
- Equipment costs
- Installation labor
- Costs related to designing the system
The maximum annual abatement is set at $62,500 or the amount of owed real property taxes.
Unlike the Federal Solar Investment Tax Credit, the program does not allow for the carryover of unused balances. Additionally, the deductions do not cover financing or interest costs, nor do they apply to costs incurred from using a local, state, or federal grant.
However, the total amount of a homeowner’s deduction through the program is not lowered if they also take advantage of other incentives.