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Volume 10 - Opinions of Counsel SBRPS No. 9

Opinions of Counsel index

Alternative veterans exemption (residence and occupancy requirement) (large tracts); Senior citizens exemption (residence and occupancy requirement) (large tracts) - Real Property Tax Law, §§ 458-a, 467:

Only the residential portion of a large tract of land may qualify for an alternative veterans exemption or a senior citizens exemption.

We have been asked to render an opinion concerning the eligibility of a large tract of land to receive an alternative veterans exemption (Real Property Tax Law, § 458-a) or a senior citizens exemption (RPTL, § 467). The facts are that a taxpayer owns a home located on 125 acres. For purposes of this inquiry, we will assume that he satisfies all of the other statutory requirements for the exemptions.

The alternative veterans exemption is available to “qualifying residential real property” which is defined in section 458-a(1)(d), in part, as follows:

(d) “Qualifying residential real property” means property owned by a qualified owner which is used exclusively for residential purposes; provided however, that in the event any portion of such property is not so used exclusively for residential purposes but is used for other purposes, such portion shall be subject to taxation and the remaining portion only shall be entitled to the exemption provided by this section. . . .

The statutory language quoted above is very similar to that used in the senior citizens exemption (RPTL, § 467), subdivision 3(c) of which provides:

3. No exemption shall be granted


(c) unless the property is used exclusively for residential purposes, provided, however, that in the event any portion of such property is not so used exclusively for residential purposes but is used for other purposes, such portion shall be subject to taxation and the remaining portion only shall be entitled to the exemption provided by this section;

Following the enactment of section 467 (added L.1966, c.616), as the agency charged with advising assessors, the State Board was soon asked how to address the issue of senior citizens exemptions for large land holdings, such as farms. In 2 Op.Counsel SBEA No. 17, we concluded that the exemption could be granted to the residential portion of a farm if it were separately assessed. A similar conclusion was reached in 2 Op.Counsel SBEA No. 14.

Later, the State Board was asked how an assessor should determine the amount of acreage qualifying for exemption. Counsel opined that a town could not enact an ordinance to limit the acreage to a set amount, but that the assessor should determine the average size residential lot (e.g., by reference to local zoning laws) and grant the exemption to that much acreage (5 Op.Counsel SBEA No. 8). This is in recognition of the multi-faceted nature of New York State: the average “residence” in a rural area of the State likely includes more acreage than in a more urbanized area.

In 1981, the Legislature added Articles 18 and 19 to the RPTL, authorizing preferential tax treatment for residential property (L.1981, c.1057). The new law required classification of the homestead or residential portion of property in “special” and “approved” assessing units. We then expressed the opinion that senior citizens exemptions could be granted to the residential portions, as so classified on the assessment roll; separate assessment was no longer necessary (7 Op.Counsel SBEA No. 65). It was for the very purpose of allowing assessors to grant the exemption to large tracts, without separately assessing, that the State Board adopted a rule to permit assessment roll classification in other than approved assessing units (9 NYCRR 190-1.3(d)). {1} {*}

Although separate assessment and classification of assessment rolls addressed the large acreage issue, many assessors and county directors of real property tax services complained to the State Board that these procedures created problems of their own. In response, the State Board successfully sought amendment of section 467(3)(c), resulting in the language set forth above. {2}  In support of the bill, introduced at the combined request of the State Board and the Office for the Aging, which bill was subsequently enacted as chapter 440 of the Laws of 1985, we wrote:

Third, for purposes of more practical administration, this bill would provide assessors with an alternative method by which they could grant the exemption to parcels with large amounts of acreage. While the exclusive residential use requirement of the statute is easily met by most single family residences owned by eligible senior citizens, the requirement does present a difficult issue where the senior citizen’s residence is located on a large tract of land, such as a farm . . . (undated memo of State Board of Equalization and Assessment included in Governor’s Bill Jacket for L.1985, c.440).

In our opinion, neither the senior citizens exemption nor the alternative veterans exemption is intended to benefit large amounts of acreage, even where those portions are unused or are used for purposes not commonly considered exclusively residential. Other programs exist for favorable assessment of open space lands for which development rights have been granted to the municipality (General Municipal Law, § 247) or the exemption of farm land (Agriculture and Markets Law, Article 25-AA) or forest land (RPTL, §§ 480, 480-a). Each of these programs requires the property owner to make a formal commitment of his or her property, either for a specified use or that it will be left in its natural state.

A recent judicial decision also supports our conclusion. In Neuner v. Town of New Windsor, 212 A.D.2d 711, 622 N.Y.S.2d 606 (2d Dept. 1995), the court upheld an assessor’s decision to allow a senior citizens exemption to a house and 3.2 acres under and around the house, instead of allowing the exemption to the entire 79 acre tract. The court said:

We conclude that the granting of the partial exemption was permissible under the statute [citations omitted]. Moreover, we conclude that the Assessor’s determination that only 3.2 acres of the total parcel was being used for residential purposes was supported by the record and was not arbitrary and capricious [citation omitted] (622 N.Y.S.2d at 607). {3} 

There is nothing in legislative history to indicate any intent to permit the senior citizens or alternative veterans exemption to be construed to exempt excess land, that is, land in excess of that underlying and in close proximity to the home site. Indeed, what evidence which does exist is to the contrary. It is only the residential portion of a large tract which qualifies for exemption pursuant to section 458-a or 467. How much acreage qualifies will differ depending on local conditions. In the first instance, the determination of the amount of land subject to the exemption will be a determination for the assessor; his or her decision will then be subject to administrative and judicial review.

June 16, 1995

{1}  Roll classification is required in special assessing units (RPTL, § 1802; 9 NYCRR 190-1.2(b)(11)) and approved assessing units (RPTL, § 1903; 9 NYCRR 190-1.2(b)(12)). It is noteworthy that the State Board’s duly adopted rules to implement Articles 18 and 19 include an absolute maximum of ten acres for “class one” and “homestead” property (9 NYCRR 190-3.1(f)(1), 190-4.1(g), respectively {*}). This limitation has also been recognized statutorily. Chapter 594 of the Laws of 1992 amended the definition of “homestead class” (RPTL, § 1901(13)(a)) to include all vacant land parcels located in an assessing unit, which has a zoning law or ordinance in effect, provided that such parcels (a) are located in a zone that does not allow a residential use other than for one, two or three family dwelling purposes and (b) do not exceed ten acres.

{2}  That same year, we also supported the amendment of section 458-a(1)(d) to the language quoted above (L.1985, c.899, § 3).

{3}  The court distinguished (correctly in our opinion) its earlier decision to the contrary (Neuner v. Town of New Windsor, 130 A.D.2d 637, 515 N.Y.S.2d 563 (2d Dept. 1987)) where the Town had stipulated to the use of the property.

{*}  Rule(s) repealed subsequent to issuance of opinion.