Assessor Manuals, Exemption Administration: RPTL Sections 485-h, 485-i, 485-j, 485-k, 485-l, 485-m, 485-q

Exemption Administration Manual—Part 1: Residential—Other than multiple dwellings

Section 4.01 - RPTL Sections 485-h, 485-i, 485-j, 485-k, 485-l, 485-m, 485-q: Residential investment in certain municipalities

Related statutes:

None

Summary:

To the extent allowed by local option, residential property that is constructed as the primary residence of the property owner and meets certain location and cost requirements (see Property Location and Property Use requirements below) is partially exempt from municipal taxation (see Limitation on Exemption below), but is liable for county taxes, county special ad valorem levies, and special assessments. The amount of the exemption is limited to a percentage of the increase in assessed value attributable to the construction, and may be granted only after the construction project has been completed. The duration of the exemption is limited to 10 years.

Eligibility requirements

Ownership requirements:

None.

Property location requirements:

Property use requirements

The property must be used as the primary residence of the owner or owners, and if the municipality's local law or resolution provides, must be of a specific type as designated in local law or resolution (see Local Option below). The value of the construction must exceed the statutory minimum (see below) or a greater amount specified in local law or resolution (see Local Option below):

Certification by State or local government:

Completion of the construction project must be demonstrated by a certificate of occupancy or other appropriate document.

Required construction start date or other time requirement:

Construction must begin on or after the date required by state law (see below) or such later date specified by local law or resolution:

Local option:

Yes. Eligible municipality taxing jurisdictions are allowed certain choices:

Exemption

To allow the exemption, a municipality meeting the population requirements may choose whether or not to allow the exemption. The option to exempt must be exercised by the municipality through adoption of a local law or resolution, and in all cases a public hearing must be held prior to adoption of the local law or resolution.

Percentage of exemption

A municipality allowing the exemption may reduce the percentage of exemption allowed in each year by state law (see Calculation of Exemption below). If the percentage of exemption allowed is reduced, projects in the course of construction and exemptions existing prior to passage of the local law or resolution reducing the percentage of exemption will not be subject to such a reduction. Furthermore, a municipal corporation which has reduced the percentage of exemption may later increase the percentage of exemption up to the maximum allowed through adoption of an additional law or resolution, provided, however, that any such local law or resolution will apply only to construction commenced subsequent to the local law or resolution's effective date.

Construction start date

The municipality may specify in its local law any date after that required by state law (see Required Construction Date or Other Time Requirements above) as the date after which construction must have commenced for the property to be eligible for exemption.

Construction cost

The municipality may, in its local law per resolution, increase the required minimum cost of construction from any amount in excess of that required by state law to any greater amount not exceeding a maximum amount, as stated below.

Residential incentive board

Each municipality may, by local law or resolution, establish a Residential Incentive Board. The Board must present to the appointing local legislative body a plan that addresses the following: 

Eligible residential property:

The plan must designate which types of residential property should be eligible for the exemption.

Extent of exemption:

The plan must recommend whether the exemption granted should apply the basic percentage of exemption or, where applicable, the accelerated strategic exemption schedule.

Eligible areas:

The plan must identify specific geographic areas in the municipality where the exemption should be made available.

In developing its plan, the Residential Incentive Board (RIB) must consider the planning objectives of the municipality, the necessity of the exemption to attract or retain homeowners and the economic benefit to the exemption area. (In the case of Jamestown City School District, the Dunkirk City School District, the Utica City School District, the Greater Amsterdam School District, and the Rome City School District, the RIB must consider the planning objectives of the school district.)

If a municipality establishes a Residential Incentive Board, it may adopt a local law or resolution restricting eligible residential property to those which have been designated by the RIB. If adopted, such a local law or resolution must restrict the availability of the exemption to specific geographic areas identified in the plan submitted by the Board. Where allowed by state law, such a local law or resolution may also authorize use of the accelerated strategic exemption schedule. If this schedule is authorized in the local law or resolution, the law or resolution must: (1) contain findings that the adoption of this accelerated strategic exemption is necessary to encourage targeted residential development, and that the value of the exemptions to be provided is justified by the need to broaden the tax base; (2) limit the applicability of such schedule to projects where the cost of construction exceeds the maximum allowable amount for the exemption (see Construction Cost above); and (3) provide that such exemptions are restricted to designated geographic areas. (The accelerated strategic exemption may only be approved by the City of Jamestown (RPTL §485-h), the City of Oneonta (RPTL §485-q) and by the Jamestown City School District (RPTL §485-i).)  

Limitation of exemption

1. §485-h (City of Jamestown), §485-i (City of Rome), §485-j (City of Amsterdam), §485-j (City of Niagara Falls), §485-j (City of Utica), §485-q (City of Oneonta)

2. §485-i (Jamestown City School District), §485-k (Utica City School District), §485-l (Greater Amsterdam School District), §485-m (Rome City School District)

*See Calculation of Exemption below.
**If allowed by local option.

3. §485-j (City of Dunkirk and Dunkirk School District)

*See Calculation of Exemption below.
**If allowed by local option.

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

The schedule to be followed in calculating the exemption depends on which of the two types of exemption available the general municipal or school district taxing jurisdiction has chosen to grant: the basic exemption or the accelerated strategic exemption. The exemption applies only to certain municipal taxes as specified below:

Basic exemption

Unless reduced by local law, the following percentages of the increase in assessed value resulting from the construction should be applied:

Accelerated strategic exemption:

The following percentages of the increase in assessed value attributable to the construction should be applied (currently available only under RPTL § 485-h (City of Jamestown), RPTL §485-q (City of Oneonta) and § 485-i (Jamestown City School District):

Note: As enacted, the basic exemption and the accelerated strategic exemption are the same.

For both of the above types of exemption, the exempt amount for each year is to be calculated on the basis of the exemption base, defined as the increase in assessed value in the first year of the 10-year period, unless there has occurred in any year a change in the assessing unit's level of assessment of 15% or more for a final assessment roll, in which case the exemption base must be adjusted by the fraction resulting by dividing the total assessed value of the parcel on that final roll (after accounting for any physical or quantity changes since the prior roll) by the total assessed value on the immediately preceding assessment roll. See Reporting Requirements (Assessor) below.

Special ad valorem levies and special assessments:

Cities and school districts do not levy special ad valorem levies; no exemption from special assessments is allowed.

Coding of exemption on assessment roll:

Assessment roll section(s):

Taxable (RPS Section 1).

Note: These codes should not be used to identify properties that are exempt under any of the statutes listed under similar exemptions below. For coding of such properties, see the exemption profile for the statute that apply.

Filing requirements (owner or occupant of property)

Reporting requirements (assessor):

Where the exemption base is adjusted because of a change in the assessing unit's level of assessment of 15% or more (see Calculation of Exemption above), the assessor must provide written notice of such exemption adjustment to the property owner. The owner may apply for a correction as provided under RPTL §§552 and 553, if he or she believes the adjustment was calculated incorrectly.

Similar exemptions

 Exemption application forms and instructions: available at property tax forms Property tax forms - Exemptions.

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