Volume 4 - Opinions of Counsel SBEA No. 108
Not-for-profit housing companies exemption (scope) - Private Housing Finance Law, § 33, Real Property Tax Law, § 422:
Land and improvements owned by a corporation organized under the Not-for-Profit Corporation Law and used exclusively to provide housing and auxiliary facilities for aged persons of low income is exempt from taxation under section 422 of the Real Property Tax Law. If in excess of 10 percent of the property is not used for such housing, but is used for purposes pursuant to Article 2 of the Private Housing Finance Law exemption of the total property is limited to the extent of any increase in value over the assessed value on the date of acquisition. If up to 10 percent of the property is so used, such portion is subject to the limited exemption.
We have received an inquiry requesting our opinion as to the extent of the exemption accorded by section 422 of the Real Property Tax Law to the project of a nonprofit limited-profit housing company used to provide housing for aged persons of low income located in a city. The question is whether the exemption authorized by section 422 applies to the land and improvements or to the improvements only.
It appears that the requirements of section 422 have been met. Namely, the project (1) is owned by a corporation organized under the Not-for-Profit Corporation Law and Article 2 of the Private Housing Finance Law and (2) is used exclusively to provide housing and auxiliary facilities for aged persons of low income.
Under the wording of section 422, “real property” so owned and so exclusively used is “exempt from taxation”. This wording in our opinion confers a total exemption to the project, that is, both land and improvements.
We point, however, to the provisions of subdivision (b) of section 422. We construe this subdivision as providing that:
1. If any portion of the project up to 10 percent is not used for housing of persons described in paragraph (a), but is used for purposes pursuant to Article 2 of the Private Housing Finance Law, then that portion is subject to the local optional limited exemption (to the extent of any increase in value over the assessment value on date of acquisition) authorized by section 33 of the Private Housing Finance Law; and
2. If a portion of more than ten percent is not used for paragraph (a) purposes, but is used for Article 2 purposes, then the total property could receive only the aforementioned local optional limited exemption authorized by section 33.
February 12, 1975