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Volume 2 - Opinions of Counsel SBEA No. 55

Opinions of Counsel index

Aged exemption (ownership requirement) - Real Property Tax Law, § 467(3)(b):

Where an otherwise qualified property owner creates a joint tenancy in himself and another (not his spouse), and the property is later transferred back to the original owner as sole owner, no exemption under this section may be granted until the expiration of five years from the change whereby the original owner again became sole owner.

We have received an inquiry concerning the length of ownership requirement of section 467 of the Real Property Tax Law which authorizes a partial tax exemption on real property owned by certain aged persons.

For example, assume that the property in question was acquired in 1954 by A as sole owner, that in 1967 a new deed was drawn creating a joint tenancy whereby A and B (not A’s spouse) became joint owners of the property with rights of survivorship; and, that in 1971 B relinquished his interest in the property to A who became sole owner of the property. The question is whether A meets the length of ownership requirement of section 467.

Section 467 provides that real property owned by one or more persons, each of whom is sixty-five years of age or over, or one of whom, if owned by a husband and wife, who meet the qualifications of that section, shall be exempt from taxation by any municipality in which it is located to the extent of fifty per cent of the assessed valuation of the real property provided that the municipality in which the property is located adopts a local law, ordinance or resolution after holding a public hearing on the subject granting the exemption. No exemption shall be granted, however, unless title to the property shall have been vested in the owner or all of the owners of the property, or one of the owners if owned by a husband and wife, for at least sixty consecutive months prior to the date of making application for exemption (Real Property Tax Law, § 467(3)(b)).

The situation in the inquiry whereby an aged person creates a joint ownership with a near relative to avoid probate proceedings on the death of the aged person is not uncommon. Under such circumstances the aged exemption can be granted only if all joint tenants meet the requirements of section 467. Generally, in such case it is unlikely that the aged exemption can be granted even though both joint owners satisfy the income, residence and length of ownership requirements of section 467 since the near relative, usually an offspring, does not meet the age requirement (i.e., all of the owners must be sixty-five years of age or over). This disqualification cannot be immediately cured should the name of the near relative be removed from the deed whereby the aged person becomes sole owner. Where a sole owner of a real property parcel adds additional names to a deed, a new title or interest is created. Likewise, as in the example, when a name of a near relative is removed from the deed and only the name of the aged person remains, a new title or interest is created.

The transfer of title in 1971 to A caused a break in the chain of title and created a new title or interest whereby A became a sole owner. Section 467 provides that title to the property shall have been vested in the owner or owners for at least sixty consecutive months prior to making application for exemption. Accordingly, it is our opinion that in such event the property now owned solely by A will not qualify for exemption until the expiration of five years from the change whereby A again became sole owner.

Real property tax exemptions relieve one class of persons or property from the obligation to bear its share of governmental expenses and throw a heavier burden on other classes of property. For this reason courts have held that exemption statutes must be strictly construed (see, Herkimer County v. Village of Herkimer, 251 App. Div. 126, 295 N.Y.S. 629). This means that a property owner or owners must comply with all the terms and conditions of an exemption statute in order to qualify thereunder for exemption.

The obvious legislative intent in imposing the five year length of ownership requirement is that conveyances of property not be made solely to take advantage of the exemption. This exemption statute is intended to provide a means of assistance to elderly homeowners with small fixed incomes to remain in their homes of long standing. Notwithstanding this primary intent, it is not sufficient to overcome the clear, unambiguous language of the statute which requires a consecutive sixty-month period of ownership by an otherwise qualified owner of the property prior to making application for exemption.

Attention is called to an amendment with respect to the length of ownership provision (§ 467(3) (b)) which became effective June 25, 1971. This amendment permits the combining of the time of ownership of property by one spouse where all or part of the title is transferred to the other spouse with the time of such new ownership for the purpose of computing the five year period of ownership. However, this amendment applies only to husband and wife and, therefore is inapplicable to the situation presented in the example in this opinion.

July 27, 1971

NOTE:  This Opinion superseded by Opinion 12-35.

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