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Volume 1 - Opinions of Counsel SBEA No. 97

Opinions of Counsel index

Exemptions, generally (transfer after taxable status date) - Real Property Tax Law, §§ 302, 494:

Where property which is entitled to a tax exemption on taxable status date is transferred after taxable status date to a person who is not entitled to an exemption, it remains exempt until the next assessment roll is prepared. One exception to this rule is found in section 494 of the Real Property Tax Law which provides that in a city having a population of one million or more and in the County of Westchester, formerly exempt real property becomes taxable pro rata for the unexpired portion of a fiscal year.

Our comments have been requested as to the taxable status of certain real property formerly owned by a veteran who had been allowed a limited tax exemption on real property which he sold in September, 1971.

After the sale application was made to transfer the exemption to other property owned by the veteran. Bills issued in December, 1971 for town and county taxes reflect the exempt status of the property formerly owned and do not show an exemption on the other property. The taxable status of both properties is questioned as reflected in the December, 1971 bills for town and county taxes.

Subdivision 1 of section 302 of the Real Property Tax Law defines taxable status date as follows:

“1. The taxable status of real property in cities and towns shall be determined annually as of the first day of May. All real property shall be assessed in the city or town in which it is situated according to its condition and ownership as of such date. The taxable status of real property in a city or town not subject to the provisions of this section shall be determined as of the date provided by law applicable to such city or town, or if not so provided, then as of the date the assessment roll is completed and filed prior to the hearing of complaints in connection therewith. The date of taxable status of the real property contained on any assessment roll shall be imprinted or otherwise indicated at the top of the first page of each volume of such roll.”

The above statute provides that property shall be assessed according to its condition and ownership as of the applicable taxable status date. Thus, the taxable status date is the final cutoff date as of which property is assessed on the taxable or exempt portion of the assessment roll according to its condition and ownership. Any changes either in the condition or ownership after taxable status date cannot be reflected until the next ensuing assessment roll.

Therefore, property which is fully taxable on taxable status date and is acquired by an organization or person who may qualify for exemption at some period of time subsequent to taxable status date would remain taxable until the next ensuing assessment roll is prepared. Similarly, property which is exempt on taxable status date and after taxable status date is acquired by a person who is not entitled to exemption would remain exempt until the next ensuing assessment roll is prepared. The reason for this, of course, is to achieve a degree of stability and certainty in the tax structure, inasmuch as the budgetary requirements of local municipalities are predicated on the assessment roll. The taxable status date serves as a cutoff date to fix the value of all assessable real property as of one certain date and cannot be construed to embrace a shifting period.

This principle was applied as early as 1857 in the case of Mygatt v. Washburn (15 N.Y. 316, 320) where the court stated, with respect to a two-month period provided for ascertaining ownership, that “the assessment should be considered as made at the expiration of the time limited for making the inquiry, namely, on the first day of July.” Subsequent statutes have established a final date for the determination of condition and ownership and this taxable status date has been held to be conclusive with respect to these two elements (People ex rel. Twenty Third St. R. Co. v. Commissioners of Taxes and Assessments of City and County of New York, 91 N.Y. 593; People v. McDermott 265 N.Y. 47; Beekwill Realty Corp. v. City of New York 136 Misc. 757, 240 N.Y.S. 821).

One exception to this rule is provided by section 494 of the Real Property Tax Law. The provisions of section 494 apply only in a city having a population of one million or more and in the County of Westchester. In brief, section 494 makes formerly exempt real property taxable pro rata for the unexpired portion of a fiscal year where after taxable status date such property is acquired by or transferred to any person, association or corporation not entitled to an exemption. It should be noted that taxable property acquired after taxable status date by a person or organization eligible for exemption would continue to be fully taxable until the next assessment roll is prepared, and the provisions of this section would be impractical of operation in the various towns of the State where there are no year-round tax collectors.

February 28, 1972

NOTE:  Construes law prior to L.1978, c.635.

Updated: