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Volume 12 - Opinions of Counsel SBRPS No. 6

Opinions of Counsel index

Residential investment exemption (Utica) (application) (filing deadline) - Real Property Tax Law § 485-j:

Applications for the residential investment exemption applicable to the City of Utica must be filed within one year of completion of the improvement regardless of the date of purchase by the resident owner who may apply for such exemption.

We have received an inquiry concerning the residential investment exemption applicable to the City of Utica (Real Property Tax Law, § 485-j; added L. 2006, c. 602). {1}  The assessor states that an application for the exemption was filed on July 16, 2008, that is, prior to that City’s August 1, 2008 taxable status date (Utica City Charter, § 5.022). The assessor further states that the home that was finished on January 9, 2007, as evinced by a certificate of occupancy, the homeowner having purchased the same from its developer/builder on September 17, 2007.

The assessor asks whether the exemption application was timely filed. In a related question, we are asked whether section 485-j may be interpreted to mean that the aforementioned homeowner (who apparently claims the house as his or her primary residence) could have filed the exemption application as late as August 1, 2008, that is, the first taxable status date following his or her purchase of the residence from the developer.

Section 485-j affords a local option, declining, ten-year partial tax exemption to certain newly-constructed homes within the City of Utica. Section 485-j(2)(b) sets forth several conditions, all of which must be satisfied before such a residence may qualify for exemption. One such requirement is that “such construction is completed as may be evidenced by a certificate of occupancy or other appropriate documentation as provided by the owner” (RPTL 485-j(2)(b)(iv)). Section 485-j (3) further provides that “[s]uch application shall be filed with the assessor . . . on or before the appropriate taxable status date of such city and within one year from the date of completion of such construction.” Section 485-j(5) also provides that “[t]he provisions of this section shall apply to real property used as the primary residence of the owner.”

“In the construction of statutes, each word in the statute must be given its appropriate meaning, and sense must be brought out of the words used” (McKinney’s Statutes, § 94). Accordingly, in our opinion, it is necessary to consider all of the provisions of section 485-j in order to ascertain who may file a tax exemption application and within what time period.

RPTL 485-j(3), in relevant part, provides that “[s]uch exemption shall be granted only upon application by the owner of such real property . . .” As previously noted, section 485-j (5) provides that “[t]he provisions of this section shall apply to real property used as the primary residence of the owner. ” Accordingly, in our opinion, such an exemption application may be filed only by a person who, at the time when the application is filed, both owns the home and claims that house as his or her primary residence. In this case, it appears that the person who filed the exemption application on July 16, 2008 satisfied both of those requirements.

RPTL 485-j (3) also provides that such an exemption application “shall be filed with the assessor . . . on or before the appropriate taxable status date of such city and within one year from the date of completion of such structure” (emphasis added). Therefore, in our opinion, the resident owner in this case had the right to file an exemption application by no later than January 9, 2008, that is, by a date that was no more than one year after the date on which the home was finished as indicated by the certificate of occupancy (485-j(2)(b)(iv)). Such an application filing in this case (that is, an application that was filed between September 17, 2007, when this home apparently became the primary home of the applicants, and no later than January 9, 2008, when the completed home was one year old) would have applied to the City’s 2008 assessment roll prepared on the basis of an August 1, 2008 taxable status date.

Our statutory construction of section 485-j means the applicant here had a possible filing period of the 114 days between September 17, 2007 and January 9, 2008. We are constrained to reach this statutory interpretation due to the provisions adopted by the Legislature in section 485-j that do not permit an exemption application filing extension when several months occur before a new home is sold to its first resident owner. {2}

In our opinion, our interpretation of section 485-j is consistent with court decisions that have construed similar provisions that apply to the business investment exemption (RPTL, § 485 b). Section 485-b(3) provides that an application for the business investment exemption “shall be filed with the assessor . . . on or before the appropriate taxable status date . . . and within one year from the date of completion of such construction, alteration, installation or improvement” (emphasis added). The court in Braunview Associates v. Unmack stated that the assessing unit’s taxable status date “merely determines the initial year for which the taxpayer is eligible for the exemption” (227 AD2d 937, 938, 643 NYS2d 253, 255 (4th Dept 1996). The court in Metroplex Harriman Corporation v. Ruscher, 264 AD2d 396, 694 NYS2d 687 (2d Dept 1999), decided that a business investment exemption application was untimely because the application was filed more than one year after completion of the improvement as evinced by the certificate of occupancy (accord A.P. Wide World Realty v. Town of Clarkstown, 253 AD2d 874, 678 NYS2d 342 (2d Dept 1998)).

We also note, in contrast, the provisions of section 457(1) of the RPTL which authorize a local option, partial tax exemption for certain “[n]ewly constructed primary residential property purchased by one or more persons, each of whom is a first-time homebuyer . . .” RPTL section 457(9)(c) defines “newly constructed” as “an improvement to real property which was constructed as a primary residential property, and which has never been occupied and was constructed after the effective date of this section” (emphasis added). Accordingly, a newly constructed home that has never been occupied and has been purchased by a first-time homebuyer may qualify for that exemption, notwithstanding the fact that more than 12 months have transpired since the house was completed, because no such one year after completion limitation is included within section 457 (see § 457(7)).

Therefore, in our opinion, in this case, the assessor should deny as untimely the exemption application filed on July 16, 2008. It is our conclusion that a more extended filing period that would allow the assessor to approve the application would require a statutory amendment of section 485-j.

July 31, 2008


{1}  Chapter 602 applies to “cities with a population of not less than [60,600] and not more than [61,000] based upon the [2000] federal census.” The only city in the State that meets those population criteria is the City of Utica.

{2}  Indeed, had the property not been purchased until a year or more after its completion, the new owner would have had no opportunity to obtain the exemption. This result, too, would result from the statutory language.

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