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Volume 12 - Opinions of Counsel SBRPS No. 10

Opinions of Counsel index

Public authorities exemption (State of New York Mortgage Agency)(generally) - Public Authorities Law § 2412; Real Property Tax Law § 412:

Property acquired by the State of New York Mortgage Agency becomes tax exempt as of the taxable status date following its acquisition of title to real property.

We have received an inquiry concerning the taxable status of property owned by the State of New York Mortgage Agency (SONYMA). A number of assessors have received correspondence advising them that property has been transferred (though the assessors may not have yet received transfer documentation) to SONYMA which is seeking tax exempt status. We are asked how the assessors should proceed.

Under section 412 of the Real Property Tax Law, public authorities are entitled to whatever tax exemptions are afforded them in the Public Authorities Law. Section 2412 of that law exempts SONYMA property from “taxation and assessments of every kind and nature, other than assessments for local improvements [with exceptions not relevant to this inquiry].”  We suggest that the assessors verify that title to the property in question is now in SONYMA (perhaps by a referee’s deed issued in a mortgage foreclosure proceeding against the property’s previous owners).

Assuming that title is still in SONYMA as of the assessing unit’s next taxable status date, it will be entitled to exemption per section 2412 on the assessment roll prepared on the basis of that taxable status date. {1}  That is, the general rule is that entitlement to tax exempt status is measured as of taxable status date (Real Property Tax Law, § 302(1); Semple School for Girls v. Boyland, 308 NY 382, 126 NE2d 294 (1955); Long Island Power Authority v. Shoreham Wading River School District, 88 NY2d 503, 670 NE2d 419, 647 NYS2d 136 (1996)). The result is different when title is acquired by New York State itself or the United States government and sovereign immunity is claimed. {2}  In such situations, taxes which are not already a lien as of the date of acquisition are not enforceable and subject to cancellation (per RPTL, § 558). We are aware of no claim of sovereign immunity by SONYMA; indeed, the correspondence from that agency which we have seen claims exempt status as of the taxable status date following that authority’s acquisition.

Finally, note that should SONYMA thereafter convey title to the property to a taxable entity, the exemption should be removed as of the date of transfer (per RPTL, § 520).

October 7, 2008


{1}  The exemption code assigned by the State Board to SONYMA property is 12350.

{2}  We have discussed sovereign immunity in several of our Opinions of Counsel (e.g., 8 Op.Counsel SBEA Nos. 44, 106; see also Long Island Power Authority v. Shoreham Wading River School District, 88 NY2d 503, 670 NE2d 419, 647 NYS2d 136 (1996)).

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