Volume 10 - Opinions of Counsel SBRPS No. 50
Residential improvements exemption (scope) (buildings) - Real Property Tax Law, § 421-f:
The residential capital improvements exemption is applicable to improvements made to a residential structure itself. Stand-alone structures such as detached garages and in-ground swimming pools do not qualify. An attached deck, garage or porch qualifies in the absence of a limitation in the local law or resolution locally adopting the exemption.
Our opinion has been requested as to the scope of the residential improvements exemption (Real Property Tax Law, §421-f), specifically, whether in-ground swimming pools, decks and detached garages may receive the exemption.
To begin, we note that section 421-f refers to “residential buildings” as receiving the benefit of the exemption. The term is defined in section 421-f(5) as “any building or structure designed and occupied exclusively for residential purposes....”
The fact that the Legislature chose to use the phrase “residential buildings” in this exemption, instead of the more commonly used “real property” (see, e.g., RPTL, §§458, 458-a, 467, 487) is significant since words in a statute are to be given their ordinary meanings unless it is plain that another meaning is intended (McKinney’s Statutes, §232). That something more narrow than real property was intended is further evidenced by the fact that “buildings” are but one definition of the term “real property” as that phrase is defined in the law (RPTL, §102(12)(b)). Our conclusion is also supported by the memorandum of the sponsor of the bill which first enacted section 421-f. Senator Owen H. Johnson wrote:
This bill would extend statewide an exemption offered in New York City for residential improvements. The value of property is increased due to residential rehabilitation. The increased value of the property is then reflected in the next assessment, thereby subjecting the owner to additional tax liability for those improvements. This fact has been a disincentive to homeowners who would like to rehabilitate their homes but cannot afford the increased tax liability. An exemption would encourage the rehabilitation of homes and, thereby, improve the neighborhoods in which they are located (1993 New York State Legislative Annual, p.540).
Of course, we must recognize that the Legislature chose to allow the exemption to be granted to more than just rehabilitated homes. That is, municipalities are authorized but not mandated to limit the exemption to prescribed forms of reconstruction, alterations or improvements (RPTL, §421-f(7)(a)(ii)) or even just improvements which bring property “up to code” (RPTL, §421-f(7)(a)(iii)). Nevertheless, the terminology used in the statute leads us to conclude that the intent was to limit the exemption to improvements made to the residential structure itself. Stand-alone structures such as detached garages and in-ground swimming pools do not seem to qualify. An attached deck, garage or porch would seem to qualify in the absence of a limitation in the local law or resolution locally adopting the exemption.
March 7, 1996