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Department of Taxation and Finance

Volume 4 - Opinions of Counsel SBEA No. 99

Opinions of Counsel index

Aged exemption (income requirement) (social security benefits) - Real Property Tax Law, § 467:

Section 467 of the Real Property Tax Law specifically requires that social security benefits be computed as income for purposes of this section.

We have been asked whether social security benefits should be excluded from the computation of income for purposes of section 467 since such benefits are not taxable under federal and state income tax laws.

Section 467 provides that the owner-occupied legal residence of persons sixty-five years of age or over with limited incomes shall be exempt from taxation to the extent of 50 percent of the assessed valuation thereof provided that they have owned their homes for at least twenty-four consecutive months prior to the date of making application for exemption, and provided further that the municipality in which the property is located (i.e., county, city, town, village or school district) , after holding a public hearing on the matter, adopts a local law, ordinance, or resolution granting the exemption. Each granting municipality must set an annual income limit at any level of its own choosing between $3,000 and $6,500.

Subdivision 3(a) of this section provides that no exemption shall be granted if the income of the applicant(s) exceeds the limit set by the granting municipality. This subdivision further provides that “[such income shall include social security and retirement benefits, interest, dividends, net rental income, salary or earnings, and net income from self-employment, but shall not include gifts or inheritances” (emphasis added).

Thus, the statute itself specifically requires that social security benefits be included as income for purposes of this exemption, notwithstanding the fact that such benefits are not taxable under federal and state income tax laws. In this connection, attention is directed to a 1973 decision of the Court of Appeals where the matter was treated in part, Engle v. Talarico, 33 N.Y.2d 237, 306 N.E.2d 796, 351 N.Y.S.2d 677. There the Court stated, at p. 679, that “[the] Legislature expressed no intention of incorporating the Federal or State tax rules into the exemption statute.”

February 5, 1975