Volume 1 - Opinions of Counsel SBEA No. 52
Veterans’ exemption (ownership) (executory contract of sale) - Real Property Tax Law, § 458:
If a veteran enters into an executory contract of sale and the vendee takes possession of the property, a veterans’ exemption previously granted based on the ownership of the vendor should be removed. If the vendee in possession is a veteran, however, and uses eligible funds in the purchase of the property he may apply for a veterans’ exemption.
Our opinion has been requested as to whether a veteran is entitled to a continuance of a veterans’ exemption in a case where he has entered into an executory contract of sale wherein he agrees to execute and deliver a deed to the subject property upon payment of the purchase price in five years.
All real property is required to be assessed according to its condition and ownership as of taxable status date each year and assessments are made against the real property itself (Real Property Tax Law, sections 302, 304) and the owner of real property for exemption purposes is normally the person liable for the taxes. For example, a vendee in possession of real property under an executory contract of sale is regarded as the owner of the property for purposes of taxation since the burden of taxation is rightfully placed upon possession rather than ownership (Wilson and Co. v. City of New York, 73 N.Y.S.2d 206, aff’d 276 App. Div. 757, 92 N.Y.S.2d 918).
Therefore, if a veteran enters into an executory contract of sale and the vendee takes possession of the property, a veterans’ exemption previously granted based on the ownership of the vendor should be removed. It should be noted, however, that a vendee in possession, if he is a veteran and uses eligible funds in the purchase of the property pursuant to the executory contract of sale, could apply for a veterans’ exemption.
However, if the vendor remains in possession, exemptions to which he may be entitled by reason of his ownership would continue until such time as possession is delivered to the vendee.
January 18, 1972