Volume 1 - Opinions of Counsel SBEA No. 54
Veterans’ exemption (ownership) (partnership) Real Property Tax Law, § 458:
If title to property is held in a partnership name, the ownership requirement of the veterans’ exemption statute is not satisfied and an exemption is not authorized even though all the other requirements of the statute are met.
Our opinion has been requested as to whether a father and son would be eligible for a veterans’ exemption where they have formed a partnership to manage and operate an apple orchard.
In order to qualify for a veterans’ exemption the property in question must be owned by a veteran, his wife, his unremarried widow, his minor children or his dependent parents and such property must have been purchased with eligible funds as defined in section 458 of the Real Property Tax Law.
If title to the property has been conveyed to the partnership in the partnership name, the ownership requirement would not be satisfied and an exemption would not be authorized even though each of the partners is a veteran who has received eligible funds and used the same in the purchase of the property.
If title to the property is vested solely in either the father or the son, an exemption would be authorized only to the extent of the eligible funds received by the owner and actually used in the purchase of the property. As long as these requirements are satisfied, the exemption would be authorized although the apple orchard is managed and operated by both parties. However, as stated above, if the title is transferred to the partnership in the partnership name, the exemption would not be authorized.
If title to the property is vested in the father and the son, the extent to which a veterans’ exemption may be authorized would depend upon the nature of the ownership. If they hold title as tenants in common, each would own an undivided interest in the property to the extent set forth in the conveyance which created the tenancy in common. Absent such a statement, each would be considered to be the owner of an undivided one-half interest in the property.
If the conveyance states that the interest of the father is two-thirds and the interest of the son one-third and the assessed valuation of the property is $9,000, then the assessed valuation of the interest of the father, for purposes of this exemption, would be $6,000 and the assessed valuation of the interest of the son would be $3,000. Assuming that each received $5,000 in eligible funds which were used in the purchase of the property, an exemption to the extent of $5,000 would be authorized as to the father and to the extent of $3,000 as to the son.
If title to the property is vested in the father and son as tenants in common with no statement as to the interest of each in the property, each is the owner of an undivided one-half interest and in such a case the assessed valuation of the interest of each would be $4,500. In such a case an exemption would be authorized to the extent of $4,500 as to the father and $4,500 as to the son. Again, any such exemption is dependent upon eligible funds being used toward the purchase of the property in question.
If title is held by the father and son as joint tenants, each has an interest in the entire property subject to the right of survivorship in the other. In such a case each would be entitled to claim an exemption not exceeding $5,000 against the total assessed value of the property. In the example set forth above, the exemption would be limited to $9,000, that being the total assessed valuation of the property. If the assessment was increased in a subsequent year, the owners could apply for an additional exemption to the extent of the balance of the eligible funds used in the purchase for which they were not previously given credit.
January 10, 1972