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Volume 6 - Opinions of Counsel SBEA No. 108

Opinions of Counsel index

Veterans exemption (seriously disabled veteran) (transfer of exemption) - Real Property Tax Law, § 458(3):

When a seriously disabled veteran receiving an exemption under Real Property Tax Law, section 458(3), sells his residence and uses the proceeds therefrom in the purchase of another residence which qualifies under section 458(3), he should continue to receive the exemption.

This inquiry is concerned with the continuation of an exemption granted to a seriously disabled veteran (see, Real Property Tax Law, § 458(3)) who has been receiving an exemption, but who is now selling his home and purchasing another.

Subdivision 1 of section 458 provides that property owned by a veteran or certain other persons designated in the statute may be entitled to receive an exemption to the extent (not to exceed $5,000) that certain designated moneys (eligible funds) were used in the purchase of property. This exemption is applicable to general municipal taxes, but not school taxes (§ 458(1 )(3)).

Subdivision 3 of section 458 provides an additional exemption to veterans of World War I, World War II, the Korean War, and the Vietnam War with serious service connected disabilities who have received pecuniary assistance from the United States government toward the acquisition of a suitable housing unit with special fixtures or movable facilities made necessary by the nature of the veteran’s disability (see, 38 U.S.C., § 801 et seq.). This exemption is equal to the amount of money received from the United States government for the necessary purchase, but it may not exceed $17,500. This exemption is applicable to both general municipal taxes and school taxes (1 Op.Counsel SBEA No. 60).

In reference to the exemption granted pursuant to subdivision 1 of section 458, it has long been our opinion that the proceeds from the sale of a veteran’s exempt real property used to purchase other real property are eligible funds (1 Op.Counsel SBEA No. 25), and that a veteran’s exemption may be transferred from Parcel A to Parcel B where the veteran can prove that he utilized the proceeds of sale from Parcel A in the purchase of Parcel B (5 Op.Counsel SBEA No. 35).

Although eligible funds are not relevant to the additional exemption provided by subdivision 3 of section 458, in our opinion a seriously disabled veteran should be deemed to recover the government grant used in the purchase of his original residence when such residence is sold, and if he purchases another home with similar special facilities utilizing the proceeds of sale from his original home, the additional exemption should be granted on the second home.

April 25, 1978

Updated: