§ 421-F — Exemption of capital improvements to residential buildings and certain new construction

New York § 421-F

• Jurisdiction: New York
• Law RPT: Real Property Tax
• Title 2: Private Property
• Art. 4: Exemptions

Text

§ 421-f. * Exemption of capital improvements to residential buildings\nand certain new construction.\n * NB Effective until January 1, 2026\n * Exemption of capital improvements to residential buildings.\n * NB Effective January 1, 2026\n1. Residential buildings reconstructed, altered or improved subsequent\nto the effective date of a local law or resolution pursuant to this\nsection shall be exempt from taxation and special ad valorem levies to\nthe extent provided hereinafter. After a public hearing, the governing\nboard of a county, city, town or village may adopt a local law and a\nschool district, other than a school district subject to article\nfifty-two of the education law, may adopt a resolution to grant the\nexemption authorized pursuant to this section. A copy of such local law\nor resolution shall be filed with the commissioner and the assessor of\nsuch county, city, town or village who prepares the assessment roll on\nwhich the taxes of such county, city, town, village or school district\nare levied.\n * 1-a. Buildings classified as class one property in section eighteen\nhundred two of this chapter reconstructed, altered, improved, or newly\nconstructed in a special assessing unit that is not a city shall be\nexempt from taxation and special ad valorem levies to the extent\nprovided hereinafter in the same manner and to the same extent to\ncounty, town, special district and school district taxes levied on the\nassessment roll prepared by such special assessing unit. Additional\nbuildings and yard improvements shall be excluded from receiving this\nexemption. An application shall not be required to receive the\nexemption.\n * NB Repealed January 1, 2026\n * 2. (a) Such buildings shall be exempt for a period of one year to\nthe extent of one hundred per centum of the increase in assessed value\nthereof attributable to such reconstruction, alteration or improvement,\nand new construction pursuant to subdivision one-a of this section, and\nfor an additional period of seven years subject to the following:\n (i) The extent of such exemption shall be decreased by twelve and\none-half per centum of the "exemption base" each year during such\nadditional period. The "exemption base" shall be the increase in\nassessed value as determined in the initial year of the term of the\nexemption, except as provided in subparagraph (ii) of this paragraph.\n (ii) In any year in which a change in level of assessment of fifteen\npercent or more is certified for a final assessment roll pursuant to the\nrules of the commissioner, the exemption base shall be multiplied by a\nfraction, the numerator of which shall be the total assessed value of\nthe parcel on such final assessment roll (after accounting for any\nphysical or quantity changes to the parcel since the immediately\npreceding assessment roll), and the denominator of which shall be the\ntotal assessed value of the parcel on the immediately preceding final\nassessment roll. The result shall be the new exemption base. The\nexemption shall thereupon be recomputed to take into account the new\nexemption base, notwithstanding the fact that the assessor receives\ncertification of the change in level of assessment after the completion,\nverification and filing of the final assessment roll. In the event the\nassessor does not have custody of the roll when such certification is\nreceived, the assessor shall certify the recomputed exemption to the\nlocal officers having custody and control of the roll, and such local\nofficers are hereby directed and authorized to enter the recomputed\nexemption certified by the assessor on the roll. The assessor shall give\nwritten notice of such recomputed exemption to the property owner, who\nmay, if he or she believes that the exemption was recomputed\nincorrectly, apply for a correction in the manner provided by title\nthree of article five of this chapter for the correction of clerical\nerrors.\n (iii) Except in a special assessing unit that is not a city, such\nexemption shall be limited to eighty thousand dollars in increased\nmarket value, or such other sum less than eighty thousand dollars, but\nnot less than five thousand dollars as may be provided by the local law\nor resolution, of the property attributable to such reconstruction,\nalteration or improvement and any increase in market value greater than\nsuch amount shall not be eligible for the exemption pursuant to this\nsection. In a special assessing unit that is not a city, the exemption\nshall be limited to seven hundred fifty thousand dollars in increased\nmarket value. For the purposes of this section, the market value of the\nreconstruction, alteration or improvement, or new construction as\nauthorized by subdivision one-a of this section, shall be equal to the\nincreased assessed value attributable to such reconstruction,\nalteration, improvement or new construction divided by the class one\nratio in a special assessing unit or the most recently established state\nequalization rate or special equalization rate in the remainder of the\nstate, except where the state equalization rate or special equalization\nrate equals or exceeds ninety-five percent, in which case the increase\nin assessed value attributable to such reconstruction, alteration,\nimprovement or new construction shall be deemed to equal the market\nvalue of such reconstruction, alteration or improvement.\n (b) Except in a special assessing unit that is not a city, no such\nexemption shall be granted for reconstruction, alterations or\nimprovements unless:\n (i) such reconstruction, alteration or improvement was commenced\nsubsequent to the effective date of the local law or resolution adopted\npursuant to subdivision one of this section; and\n (ii) the value of such reconstruction, alteration or improvement\nexceeds three thousand dollars; and\n (iii) the greater portion, as so determined by square footage, of the\nbuilding reconstructed, altered or improved is at least five years old.\n (c) For purposes of this section the terms reconstruction, alteration\nand improvement shall not include ordinary maintenance and repairs.\n * NB Effective until January 1, 2026\n * 2. (a) Such buildings shall be exempt for a period of one year to\nthe extent of one hundred per centum of the increase in assessed value\nthereof attributable to such reconstruction, alteration or improvement\nand for an additional period of seven years subject to the following:\n (i) The extent of such exemption shall be decreased by twelve and\none-half per centum of the "exemption base" each year during such\nadditional period. The "exemption base" shall be the increase in\nassessed value as determined in the initial year of the term of the\nexemption, except as provided in subparagraph (ii) of this paragraph.\n (ii) In any year in which a change in level of assessment of fifteen\npercent or more is certified for a final assessment roll pursuant to the\nrules of the commissioner, the exemption base shall be multiplied by a\nfraction, the numerator of which shall be the total assessed value of\nthe parcel on such final assessment roll (after accounting for any\nphysical or quantity changes to the parcel since the immediately\npreceding assessment roll), and the denominator of which shall be the\ntotal assessed value of the parcel on the immediately preceding final\nassessment roll. The result shall be the new exemption base. The\nexemption shall thereupon be recomputed to take into account the new\nexemption base, notwithstanding the fact that the assessor receives\ncertification of the change in level of assessment after the completion,\nverification and filing of the final assessment roll. In the event the\nassessor does not have custody of the roll when such certification is\nreceived, the assessor shall certify the recomputed exemption to the\nlocal officers having custody and control of the roll, and such local\nofficers are hereby directed and authorized to enter the recomputed\nexemption certified by the assessor on the roll. The assessor shall give\nwritten notice of such recomputed exemption to the property owner, who\nmay, if he or she believes that the exemption was recomputed\nincorrectly, apply for a correction in the manner provided by title\nthree of article five of this chapter for the correction of clerical\nerrors.\n (iii) Such exemption shall be limited to eighty thousand dollars in\nincreased market value, or such other sum less than eighty thousand\ndollars, but not less than five thousand dollars as may be provided by\nthe local law or resolution, of the property attributable to such\nreconstruction, alteration or improvement and any increase in market\nvalue greater than such amount shall not be eligible for the exemption\npursuant to this section. For the purposes of this section, the market\nvalue of the reconstruction, alteration or improvement shall be equal to\nthe increased assessed value attributable to such reconstruction,\nalteration or improvement divided by the class I ratio in a special\nassessing unit or the most recently established state equalization rate\nor special equalization rate in the remainder of the state, except where\nthe state equalization rate or special equalization rate equals or\nexceeds ninety-five percent, in which case the increase in assessed\nvalue attributable to such reconstruction, alteration or improvement\nshall be deemed to equal the market value of such reconstruction,\nalteration or improvement.\n (b) No such exemption shall be granted for reconstruction, alterations\nor improvements unless:\n (i) such reconstruction, alteration or improvement was commenced\nsubsequent to the effective date of the local law or resolution adopted\npursuant to subdivision one of this section; and\n (ii) the value of such reconstruction, alteration or improvement\nexceeds three thousand dollars; and\n (iii) the greater portion, as so determined by square footage, of the\nbuilding reconstructed, altered or improved is at least five years old.\n (c) For purposes of this section the terms reconstruction, alteration\nand improvement shall not include ordinary maintenance and repairs.\n * NB Effective January 1, 2026\n * 3. Except in a special assessing unit that is not a city, such\nexemption shall be granted only upon application by the owner of such\nbuilding on a form prescribed by the commissioner. The application shall\nbe filed with the assessor of the city, town, village or county having\nthe power to assess property for taxation on or before the appropriate\ntaxable status date of such city, town, village or county. In a special\nassessing unit that is not a city, the exemption shall be applied based\nupon that completion of reconstruction, alteration, improvement or new\nconstruction on or before the applicable taxable status date of the\nspecial assessing unit; provided, however that the exemption for such\nreconstruction, alteration, improvement or new construction that\noccurred after the taxable status date of such special assessing unit\nfor the two thousand nineteen -- two thousand twenty assessment roll and\non or before the taxable status date of such special assessing unit for\nthe two thousand twenty -- two thousand twenty-one assessment roll shall\nbe applied beginning with the two thousand twenty-one -- two thousand\ntwenty-two assessment roll.\n * NB Effective until January 1, 2026\n * 3. Such exemption shall be granted only upon application by the\nowner of such building on a form prescribed by the commissioner. The\napplication shall be filed with the assessor of the city, town, village\nor county having the power to assess property for taxation on or before\nthe appropriate taxable status date of such city, town, village or\ncounty.\n * NB Effective January 1, 2026\n 4. If satisfied that the applicant is entitled to an exemption\npursuant to this section, the assessor shall approve the application and\nsuch building shall thereafter be exempt from taxation and special ad\nvalorem levies as herein provided commencing with the assessment roll\nprepared on the basis of the taxable status date referred to in\nsubdivision three of this section. The assessed value of any exemption\ngranted pursuant to this section shall be entered by the assessor on the\nassessment roll with the taxable property, with the amount of the\nexemption shown in a separate column.\n * 5. For the purposes of this section, except in a special assessing\nunit that is not a city, a residential building shall mean any building\nor structure designed and occupied exclusively for residential purposes\nby not more than two families.\n * NB Effective until January 1, 2026\n * 5. For the purposes of this section, a residential building shall\nmean any building or structure designed and occupied exclusively for\nresidential purposes by not more than two families.\n * NB Effective January 1, 2026\n * 6. In the event that a building granted an exemption pursuant to\nthis section ceases to be used primarily for residential purposes, is no\nlonger classified as class one property in a special assessing unit that\nis not a city, or title thereto is transferred to other than the heirs\nor distributees of the owner in other than a special assessing unit that\nis not a city, the exemption granted pursuant to this section shall\ncease.\n * NB Effective until January 1, 2026\n * 6. In the event that a building granted an exemption pursuant to\nthis section ceases to be used primarily for residential purposes or\ntitle thereto is transferred to other than the heirs or distributees of\nthe owner, the exemption granted pursuant to this section shall cease.\n * NB Effective January 1, 2026\n * 7. (a) Except for a special assessing unit that is not a city, a\ncounty, city, town or village may, by its local law, or school district,\nby its resolution:\n (i) reduce the per centum of exemption otherwise allowed pursuant to\nthis section;\n (ii) limit eligibility for the exemption to those forms of\nreconstruction, alterations or improvements as are prescribed in such\nlocal law or resolution;\n (iii) provide that the exemption shall be applicable only to those\nimprovements which would otherwise result in an increase in the assessed\nvaluation of the real property but which consist of an addition,\nremodeling or modernization to an existing residential structure to\nprevent physical deterioration of the structure or to comply with\napplicable building, sanitary, health and/or fire codes.\n (b) No such local law or resolution shall reduce or repeal an\nexemption granted pursuant to this section until the expiration of the\nperiod for which such exemption was granted.\n * NB Effective until January 1, 2026\n * 7. (a) A county, city, town or village may, by its local law, or\nschool district, by its resolution:\n (i) reduce the per centum of exemption otherwise allowed pursuant to\nthis section;\n (ii) limit eligibility for the exemption to those forms of\nreconstruction, alterations or improvements as are prescribed in such\nlocal law or resolution;\n (iii) provide that the exemption shall be applicable only to those\nimprovements which would otherwise result in an increase in the assessed\nvaluation of the real property but which consist of an addition,\nremodeling or modernization to an existing residential structure to\nprevent physical deterioration of the structure or to comply with\napplicable building, sanitary, health and/or fire codes.\n (b) No such local law or resolution shall reduce or repeal an\nexemption granted pursuant to this section until the expiration of the\nperiod for which such exemption was granted.\n * NB Effective January 1, 2026\n 8. The provisions of this section shall not apply to a city with a\npopulation of more than one million.\n