Volume 10 - Opinions of Counsel SBRPS No. 21
Exemptions, generally (transfer to non-exempt owner) (assessment review); Correction of errors (generally) (judicial review) - Real Property Tax Law, §§ 520, 553:
Where formerly exempt property is transferred to a non-exempt owner and is reassessed as of the date of such transfer, that reassessed value is subject to administrative and judicial review.
Section 520 of the Real Property Tax Law provides for the imposition of a pro rata tax liability when property receiving wholly or partially tax exempt status is transferred to a non-exempt owner after taxable status date. When such a conveyance occurs, the assessor, “shall forthwith assess such property at its value as of the date of transfer . . . and shall notify the new owner of the assessment and of the right of that owner to a review of the assessment . . . as provided by title three of article five of this chapter” (§ 520(2)). The question is as to the extent of this review.
As a general rule, property is assessed according to its condition and ownership as of taxable status date (RPTL, 302) and at its value as of the applicable valuation date (RPTL, 301; see, 9 Op.Counsel SBEA No. 101). The provision in section 520(2) for reassessment as of the date of transfer is primarily aimed at wholly exempt parcels. That is, since partially exempt property is (obviously) partially taxable as well, it is presumed that the assessor will exercise due diligence in making that assessment and that the taxpayer will similarly exercise due diligence in reviewing the same. Not so for wholly exempt property. As stated in the Governor’s Program Memorandum for chapter 635 of the Laws of 1978 (reprinted at 1978 New York State Legislative Annual, p.362, 363) which added section 520 to the RPTL:
It is our understanding that it is not uncommon for an assessor to be unconcerned with the assessment he establishes for a totally tax exempt parcel, recognizing that the municipality will collect no taxes from the property whatever the assessment. To allow previously exempt property to be taxed on the assessed value established for it as exempt might be unfair to either the municipality or the new owner. This bill solves that problem by having the assessor assess the property at its value as of the date of transfer and giving the new owner a right to review the assessment (a hearing before the board of assessment review as provided in present section 553 of the Real Property Tax Law).
Clearly, section 520 does not permit assessment roll entries in a haphazard manner; the correction of error provisions of title 3 of Article 5 of the RPTL are utilized (6 Op.Counsel SBEA No. 40; 8 id. No. 26). Section 553 thereof provides for the correction of final assessment rolls and includes provision for a hearing before the board of assessment review at its so-called “second meeting” (§ 553(3)(b)). That judicial review of a determination made pursuant to section 553 is available is made evident in the statute. Section 553(4)(b) and (c), of the RPTL provide:
(b) Upon a correction to a final assessment roll made pursuant to paragraph (a) of this subdivision, the appropriate tax levying body shall immediately mail notice of the correction to the owner of the real property affected by such correction.
(c) An assessment of real property made pursuant to this section shall be subject to review as provided in article seven of this chapter. Such a proceeding shall be commenced within thirty days of the date of the mailing of the notice as provided by paragraph (b) of this subdivision.
That is, a final assessment determined in accordance with the provisions of section 553 (and, by incorporation, § 520 as well) is “final” in the same sense that any assessment determined by the board of assessment review is final. It is subject to judicial review as provided in Article 7 of the RPTL upon timely petition therefor.
April 3, 1996