TOD ABRAMS’S condo at the Orion on West 42nd Street has a custom Valcucine kitchen, floor-to-ceiling windows and views that stretch from the George Washington Bridge to the Chrysler Building.  350 West 42nd Street, Apt. 48DBought in 2007 for $1,575,000On the market now for $1,575,000Original monthly taxes: $35Current monthly taxes: $374Estimated monthly taxes in 2018: $1,629  110 Third Avenue, Apt. 5DBought in 2007 for $1,320,000On the market now for $1,499,000Original monthly taxes: $102Current monthly taxes: $339Estimated monthly taxes in 2019: $1,065  A mint-condition two-bedroom, described by the broker as having “a New York meets Los Angeles meets South Beach flavor,” it is also in a race against time. It has been on the market since March, and Mr. Abrams, who has relocated to Los Angeles to be closer to his son and for work, has already slashed the price three times, to $1.575 million. He is hoping to sell the apartment in part because his monthly real estate taxes are poised to surge by more than 400 percent over the next several years.  That jump is mainly due to the city’s 421a tax exemption program, which encouraged development of underused or unused land by drastically reducing property taxes for a set amount of time. Buyers got what seemed to be an unbelievable deal on taxes — but with the caveat that it was only temporary and that someday, their rates would rise to what everyone else was paying.  When Mr. Abrams bought the brand-new apartment in 2007, his taxes were just $35 a month; he now pays $374 a month. When the exemption runs its course, in 2018, the monthly tax bill will be an estimated $1,629.  “It is utterly ridiculous,” said Mr. Abrams, a co-president of Alternative Marketing Solutions, which helps publicize films. “I have a home in Los Angeles and Palm Springs, and California is famous for high taxes, yet we don’t pay anything close to what I will be paying.”  During the real estate boom, from 2004 until the bubble burst in 2008, thousands of condominiums were built in Manhattan under the program. There are now more than 43,000 421a condominiums, the most since the program was started in 1971.  The 10-year exemptions, which decrease by 20 percent every two years, are now beginning to run their course. As a result, thousands of apartment owners across the city are seeing their tax bills surge. And while many condo owners are expecting this, because the information is contained in building offering plans, the increases are coming at a time when real estate prices are flat and the economy continues to flounder. A tax bill that is guaranteed to rise significantly is not a strong selling point.  “It will be a rude awakening to many New Yorkers who haven’t been paying close attention,” said Robert M. Pollack, a partner at the law firm Marcus & Pollack, who represents the 60-story Orion, at 350 West 42nd Street. “And for many of them, it couldn’t come at a worse time.”  On top of the expiring exemption, a second blow to Mr. Abrams and owners of high-end condos is rising tax assessments. Over the last three years, the city has raised the value of the Orion by 10.4 percent, 9.5 percent and 9 percent, respectively.  Similarly, at 340 East 23rd Street, a 2008 condominium with interiors designed by Philippe Starck, the city has raised the building’s value over the past three years, first by 17 percent, then 10 percent, and most recently 21.5 percent.  “It’s been a frustrating process,” said Josh Fox, the president of the board at 340 East 23rd, which Mr. Pollack also represents. “The city has bumped up the valuation of our building to an extreme level. We have a beautiful new building, don’t get me wrong, but they are assessing our apartments as if we are in one of the most luxurious buildings on Fifth Avenue or the heart of TriBeCa,” rather than off First Avenue.  The high valuations are “having an enormous impact on sales prices,” said Brian Morgan, a senior vice president of CitiHabitats who also lives at 340 East 23rd, “because buyers realize there are only a few years left on these exemptions and so they say to the seller, ‘You had much lower monthly charges than we will have, so it only makes sense that we pay less than you did.’ ”  Mr. Morgan, whose taxes will rise 373 percent by the time the tax exemption expires in 2019, is representing a client who recently considered buying a two-bedroom condo at 110 Third Avenue. The asking price is $1.499 million, but the taxes will surge more than 300 percent in 2019, “so I told them it isn’t worth it for that price,” he said.  The 421a program applies to areas of Manhattan where developers build condominiums on underutilized or unused land. In most of them, the exemption lasts for 10 years, giving owners a 100 percent exemption from any increases in their real estate taxes for two years, then phasing out the exemption by 20 percent every two years over the remaining eight. In Upper Manhattan and the other boroughs, the exemption can last for 15 or 25 years.  This article has been revised to reflect the following correction:  An earlier version of this article misstated the percentage of an expected tax increase on an apartment at 497 Greenwich Street.  An earlier version of this article misstated the percentage of an expected tax increase on an apartment at 497 Greenwich Street.
Owners of New York City condos built under the 421a program are bracing for the day their tax exemptions end, and their now-low monthly real estate taxes surge.