Volume 4 - Opinions of Counsel SBEA No. 66
Veterans’ exemption (ownership) (joint tenancy by veteran and child) (termination of exemption after taxable status date - N.Y.C.) - Real Property Tax Law, §§ 458, 494:
Where a veteran entitled to exemption pursuant to section 458 and his daughter are joint owners of real property, the veteran may apply his exemption against the total assessed value of the property. Should the daughter (over 21 years of age) become sole owner of the property she would not be entitled to receive the exemption. If she became sole owner after taxable status date, the property would remain exempt until the next assessment roll is prepared except in New York City and Westchester County where the property would immediately become subject to taxation.
We have received an inquiry concerning the partial exemption from real property taxation granted by section 458 of the Real Property Tax Law, commonly known as the veterans’ exemption. The facts are that a veteran and his wife were the owners as tenants by the entirety of a parcel in New York City until the death of the wife in 1957. In 1958 the veteran and his daughter became joint owners of the property. On October 28, 1973 the veteran died, and the daughter transferred the property in June, 1974. The daughter was more than twenty-one years of age when the father died in October of 1973. The veteran received an exemption of $4,300 while he and his wife owned the property, and he continued to receive the same amount of exemption throughout the term of joint ownership with his daughter. The assessor now seeks to recover what he considers to have been an excess exemption granted from the date the joint tenancy of the veteran and daughter was created until the transfer of the property by the daughter.
We are in agreement with the State Comptroller that real property purchased by a veteran and a non-veteran, as tenants in common, is exempt from taxation to an amount of eligible funds used by the veteran in the purchase of the real property, said amount not to exceed the percentage of the veteran’s actual interest therein (11 Op.State Compt. 104; 3 Op.Counsel SBEA No. 89). However, as the Comptroller pointed out in the same opinion:
In a joint tenancy, each person therein owns the entire real property and the fee is indivisible for purposes of tenure and survivorship . . . . A veteran, therefore, as a joint tenant, must be regarded as the owner of the entire estate from the instant of the creation of the joint tenancy therein. Consequently, the property should be exempt to the extent of the eligible funds of the veteran used in its purchase.
We have said:
If title is held by [a] father and son [both of whom are veterans] as joint tenants, each has an interest in the entire property subject to the right of survivorship in the other. In such a case each would be entitled to claim an exemption not exceeding $5,000 against the total assessed value of the property (1 Op.Counsel SBEA No. 54).
It is accordingly our opinion that in this case, the veteran should have been allowed to continue to apply his veteran’s exemption against the total assessed value of his property throughout the term of the joint tenancy with his daughter.
As a general rule, where property entitled to a tax exemption on taxable status date is transferred after taxable status date to a person who is not entitled to an exemption, it remains exempt until the next assessment roll is prepared (Real Property Tax Law, § 302). We have previously expressed this opinion in relation to both the veterans’ exemption (1 Op.Counsel SBEA No. 97) and the aged exemption (1 Op.Counsel SBEA No. 119).
Section 494 of the Real Property Tax Law provides an exception to this general rule, however, which is applicable only to New York City and Westchester County. It provides, in part:
2. Whenever any person, association or corporation not entitled to an exemption from taxation acquires title to or possession of property which is exempt from taxation, such property shall immediately become subject to taxation and shall be taxed pro rata for the unexpired portion of the taxable year.
It is our opinion that this section relates to both property which had previously been totally exempt (Bronx Garment Center v. City of New York, Department of Finance, Bureau of City Collections, 199 Misc. 513, 106 N.Y.S.2d 720, aff’d, 279 App.Div. 1048, 113 N.Y.S.2d 257) and property which had been partially exempt (1961, Op.Atty.Gen. 124).
The opinion of the Attorney General held that, where a veteran acquired real property which had previously been subject to another veteran’s exemption, the new owner was liable for pro rated taxes if he failed to apply for an exemption in his own right. It necessarily follows that a non-veteran who acquires previously partially exempt property would also be liable for pro rated taxes. Thus it is our opinion, that the property belonging to the daughter was liable for taxation based on a full assessment from the date of the veteran’s (i.e., father’s) death in accordance with subdivision 3 of section 494 of the Real Property Tax Law.
December 17, 1974