Tax Benefits of Converting Legal 3 Family to Legal 2 Family?

Have any of you converted your legal three family to a legal two family and reaped noticeable tax benefits, or know what tax benefits would be?  And what did you pay for the conversion?  I’ve been told that to convert our legal 3 family used as a 2, would cost $10,000.  We pay over $6,000 per year in property taxes.  If we save $2,000 per year we end up breaking even after 5 years so we would have to be sure we’re not selling for at least 6 years, to do the conversion on our dime.  But obviously I can’t be sure we’ll save $2,000 per year and I fear that the city won’t change our tax bill at all, and keeping it a legal 3 family allows us to more easily rent the space out down the line as individual apartments (and I’ve been keeping that in mind in our renovations, so we can easily divvy up the units down the line, which is what our neighbor did and he’s made his house really profitable as a result).  We really need to know what we can expect before moving forward with anything like this. Thanks for any feedback.

jeanmarine2

in Taxes 12 years and 2 months ago

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jcarch | 12 years and 2 months ago

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I don’t believe there would be any benefit.  The city taxes buildings with more than 3 units at a higher rate.  3 units or less are all taxed at the same rate.  Of course I’m not an accountant, so take this with a grain of salt.   jcarch————————               James Cleary Architecture brownstoner.staging.wpengine.com/jamescleary

pigthree | 12 years and 2 months ago

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