NFP Frequently Asked Questions

Not-for-Profit Property Tax Exemption


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Frequently Asked Questions

1. We sold our property to another nonprofit. Does the new owner need to file an application to receive the not-for-profit tax exemption?

Yes. The new owner must submit a nonprofit tax exemption application, available here. Generally, if the application is approved, the benefit will transfer without interruption from the previous owner to the new owner.

2. Will our tax exemption be affected if we rent space to another nonprofit?

The portion that you are renting may be eligible for the tax exemption if your renter is exempt from federal taxation, uses the property for certain exempt purposes (see Eligibility), and pays you no more than necessary to cover the space’s maintenance, depreciation, and carrying costs. (Maintenance includes cleaning and repairs, carrying costs include the mortgage and insurance, and a definition of depreciation is available at the Internal Revenue Service’s website.)

In addition to the nonprofit tax exemption application, you will also submit your tenant’s articles of incorporation and by-laws, along with the lease agreement and documentation of the maintenance, depreciation, and carrying costs.

Please inform the Department of Finance if you are renting or planning to rent your space to any nonprofit or for-profit organization.

3. Will our tax exemption be affected if we rent space to a commercial or for-profit organization?

Yes. If your property qualifies for the exemption—which will be determined after you submit your application—the portion being rented will not. Please inform the Department of Finance if you are renting or plan to rent your space to any nonprofit or for-profit organization.

4. We plan to demolish the building at our exempt property and construct a new one. Must we inform the Department of Finance in order to continue receiving our exemption?

Yes. We will need documentation that you will be building for an exempt purpose. This would include the architect’s plans, permits from the Department of Buildings, or evidence that you have established a building fund.

5. Why do I have to complete a separate renewal form for the vacant lot we use for parking?

Property tax exemptions are granted to tax lots. Even though your parking lot may be adjacent to your building, if it is on a separate tax lot, we will need you to submit a separate renewal form. You can determine whether your parking lot is on a separate tax lot by looking up its borough, block, and lot (BBL) number here. If the lot number is different from that of your building, you will need to submit renewal forms for both sites.