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Department of Taxation and Finance

Volume 7 - Opinions of Counsel SBEA No. 16

Opinions of Counsel index

Aged exemption (residence and occupancy requirement) (exclusivity of residential use) - Real Property Tax Law, § 467:

In determining eligibility for the aged exemption (Real Property Tax Law, § 467), an assessor may grant the exemption despite occasional or incidental non-residential use of the property for which the exemption is sought. Whether non-residential use is “occasional” or “incidental” is a question of fact to be determined on a case-by-case basis. Where non-residential use is more than incidental or occasional, no aged exemption may be granted, unless the portion of the property not used exclusively for residential purposes is capable of being separately assessed and is so assessed, in which case that portion used exclusively for residential purposes may receive the exemption.

Among the requirements which must be satisfied before an applicant may receive an aged exemption (Real Property Tax Law, § 467) is that the property for which exemption is sought must be “used exclusively for residential purposes” (§ 467(3)(c)). Our opinion is sought as to whether this provision is violated when an individual uses a portion of his home for occasional business or professional use.

We have previously expressed the opinion that if a portion of property is used for other than residential purposes, is capable of being separately described and assessed on the assessment roll, and is so assessed, that an exemption would apply to the separately assessed portion used exclusively for residential purposes (2 Op. Counsel SBEA No. 48). Similarly, we have previously concluded that where an aged person resides on a farm, that an aged exemption may be granted to the residential portion of the property (i.e., the farm house and supporting land) provided it is separately assessed from the remaining farmland which is not entitled to the aged exemption (id.).

The term “exclusively” is not defined in the Real Property Tax Law although it is used in several sections of that Law (other than § 467) providing exemption from taxation (see, e.g., §§ 420, 422, 424, and 432). The term “exclusively” in section 420 has been defined by the courts to mean “principally” or “primarily” (People ex rel. Blackburn v. Barton, 63 App.Div. 581, 71 N.Y.S. 933 (4th Dept., 1901); Association of the Bar of the City of New York v. Lewisohn, 34 N.Y.2d 143, 313 N.E.2d 30, 356 N.Y.S.2d 555 (1974); Mohonk Trust v. Board of Assessors of Town of Gardiner, 47 N.Y.2d 476, 392 N.E.2d 876, 418 N.Y.S.2d 763 (1979)). For example, in construing an antecedent statute to section 420, the court in Blackburn (supra) stated:

In determining whether property is used for the purposes of an institution of this kind, so as to exempt it from taxation, it must be made to appear that the use is necessary or fairly incidental to the maintenance of the institution for the carrying out of the purpose for which it was organized. It is not necessary that every particle of the real estate should be devoted to the location of the buildings and the laying out of the grounds of the institution . . . (71 N.Y.S. at 935).

While these cases construe section 420, and not section 467, as a general rule, “Where the same word or phrase is used in different parts of a statute, it will be presumed to be used in the same sense throughout, and the same meaning will be attached to similar expressions in the same or a related statute” (McKinney’s Statutes, § 236).

Statutes imposing a tax are generally construed in favor of the taxpayer and against the taxing authority (People ex rel. Mutual Trust Company v. Miller, 177 N.Y. 51, 69 N.E.2d 124 (1903)). However, with respect to tax exemption statutes, such laws are to be strictly construed against the taxpayer (City of Lackawanna v. State Board of Equalization and Assessment, 16 N.Y.2d 222, 212 N.E.2d 42, 264 N.Y.S.2d 528 (1965)), but not so strictly as to defeat the settled purpose for which the exemption was enacted (Association of the Bar of the City of New York v. Lewisohn, supra). In approving the original enactment of section 467 (L.1966, c.616), Governor Rockefeller indicated that the purpose of the then new law was, “to help elderly persons living on small fixed incomes to remain in their homes despite the increases in real property taxes . . .” (1966 New York State Legislative Annual, p. 346).

Accordingly, it is our opinion that, where an assessor is faced with the question of exclusivity of residential use by an applicant for the aged exemption, he should first determine if the non-residential use is merely occasional or incidental to overall residential use. This is a determination to be made by the assessor on a case-by-case basis subject to possible administrative and judicial review.

If the assessor determines that the non-residential use is more than occasional or incidental, no aged exemption may be granted. The only exception to this rule, as noted in our prior opinions, is that where that portion of the property is not used exclusively for residential purposes but is capable of being separately assessed and is so assessed, an aged exemption may be granted to that portion of the property used exclusively for residential purposes.

July 7, 1980

NOTE:  Construes law prior to L.1985, c.440.