Institutional real estate investor modifications (Articles 9-A, 22 and 33)

For tax years beginning on or after January 1, 2025, institutional real estate investors must add back federal depreciation deductions and federal interest deductions for residential properties located in New York State that consist of no more than two dwelling units. No New York State depreciation deduction is allowed for these properties.

The interest add-back does not apply if the interest was paid or accrued in the tax year when the property was sold to an individual for use as their principal residence, or a nonprofit organization whose principal purpose is the creation, development, or preservation of affordable housing.

For more information, see Form CT-225/225-A-I , Instructions for Forms CT-225, CT-225-A, and CT-225-A/ B, and Form IT-225-I , Instructions for Form IT-225 .

[Subpart B of Part F of Chapter 59 of the Laws of 2025; Tax Law §§ 208.9(c-4), 612(y) and 1503(b)(17)]