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Volume 5 - Opinions of Counsel SBEA No. 106

Opinions of Counsel index

Aged exemption (ownership requirement) (life estate) - Real Property Tax Law, § 467:

In order to satisfy the twenty-four months length of ownership requirement of section 467 of the Real Property Tax Law, the holder of a life estate must show that the life estate has been vested for a period of twenty-four consecutive months prior to filing for the exemption, or that prior to the vesting of the life estate, the holder thereof held sole title in fee and both periods, when combined, equal or exceed twenty-four months, or in the event that the life estate becomes vested by virtue of devise by a deceased spouse or conveyance from or between living spouses, both periods of ownership, when combined, equal or exceed twenty-four continuous months prior to the filing of an application for exemption.

Our opinion has been requested with respect to the ownership requirements of section 467 of the Real Property Tax Law as it relates to persons who have been devised a life estate in real property.

Section 467 authorizes municipalities to grant a partial exemption from taxation on the owner-occupied legal residence of persons sixty-five years of age or over with limited incomes. Subdivision 3(b) of section 467 provides in part that no exemption shall be granted unless the title of the property shall have been vested in the owner for at least twenty-four consecutive months prior to the date of making application for exemption.

The Attorney General has stated in a 1968 opinion that the holder of a life estate in real property is an “owner” and is therefore qualified to make application for exemption under section 467 (1968, Op.Atty.Gen. 40). We have concurred in that conclusion (1 Op.Counsel SBEA Nos. 34 and 59).

The 1968 opinion of the Attorney General also addressed itself to the question as to whether a period of ownership in fee by a husband prior to the vesting of a life estate in the surviving spouse by devise (i.e., by will) may be considered in computing the required continuous ownership to qualify for the exemption. That question was answered in the affirmative, the Attorney General noting that subdivision 3(b) contains an exception to the continuous ownership requirement which provides “that in the event of the death of either a husband or wife in whose name title of the property shall have been vested at the time of death and then becomes vested solely in the survivor by virtue of devise by or descent from the deceased husband or wife, the time of ownership of the deceased husband or wife shall be deemed also a time of ownership by the survivor and such ownership shall be deemed continuous for purposes of computing [the required period of ownership]. . . .”

In 1 Op.Counsel SBEA No. 34 we stated that an otherwise qualified senior citizen who is entitled to an aged exemption under section 467, does not lose such exemption by reserving to himself a life estate to the property and granting a son a remainder interest in the property. That opinion notes that the rights of a remainderman with respect to ownership of such property do not ripen or come into being until the death of the life tenant.

Attention is also called to another exception relating to a married couple contained in subdivision 3(b) which provides “that in the event of a transfer by either a husband or wife to the other spouse of all or part of the title to the property the time of ownership of the property by the transferor spouse shall be deemed also a time of ownership by the transferee spouse and such ownership shall be deemed continuous. . . .”

The obvious intent in providing for a continuous period of ownership prior to filing for the exemption is that there be no transfer of real property solely for the purpose of obtaining an exemption under the provisions of this section. As indicated above, certain exceptions are provided with respect to the continuous length of ownership requirement should there be a conveyance between spouses. Accordingly, under current provisions of section 467, it is our opinion that in order to satisfy the twenty-four consecutive month ownership requirement, the holder of a life estate must show that the life estate has been vested for a period of twenty-four consecutive months prior to filing for the exemption, or that prior to the vesting of the life estate, the holder thereof held sole title in fee and both periods, when combined, equal or exceed twenty-four consecutive months, or in the event that the life estate became vested by virtue of devise by a deceased spouse or conveyance from or between living spouses, both periods of ownership, when combined, equal or exceed twenty-four continuous months prior to filing an application for exemption.

October 18, 1976

Updated: