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Volume 11 - Opinions of Counsel SBRPS No. 109

Opinions of Counsel index

Veterans exemption (generally) (prorated transferred exemption - procedure); Alternative veterans exemption (generally) (prorated transferred exemption - procedure) - Real Property Tax Law, §§ 458, 458-a:

The provisions of sections 458(9) and 458-a(8) of the Real Property Tax Law, authorizing prorated transferred veterans exemptions, are silent as to how they are to be administered. A municipality adopting either or both of those provisions is seemingly free to develop its own implementation methodology so long as the procedure outlined in the local law, ordinance, or resolution is consistent with State law and otherwise guarantees due process of law. Using the correction of errors procedures of title three of Article five of the RPTL should suffice.

Our opinion has been requested concerning implementation of chapter 166 of the Laws of 2006 which added a new subdivision nine to section 458 of the Real Property Tax Law (the eligible funds veterans exemption) and a new subdivision eight to section 458-a of the RPTL (the alternative veterans exemption). Each provision authorizes a municipality to adopt a local law, ordinance or resolution permitting veterans, who currently receive an exemption, who then sell such property, and purchase replacement property within the same municipality, {See Note} to receive a prorated exemption on such replacement property for the balance of the fiscal year. The exemption is calculated by multiplying the tax rate times the fraction of the fiscal year remaining after the replacement purchase date. This number is then applied to the exemption amount the veteran received on his or her former property. Should the veteran wish to continue to receive an exemption on his or her new property, the veteran must reapply on or before the applicable taxable status date.

The law is silent as to how it is to be administered. Likewise, the sponsors’ memo for chapter 166 provides no administrative suggestions. It has been suggested that the fairly complex procedures currently in place for the transfer of the senior citizens exemption (RPTL, § 467(9)) might be copied into the local authorization for the prorated transferred veterans exemptions. {1}  While it might be possible to do so, since sections 458(9) and 458-a(8) base the prorated transferred exemption on the assessment of the former property, not the replacement property, it would not seem advisable or necessary to adopt those procedures, at least not in toto.

So long as the procedure outlined in the local law, ordinance, or resolution is consistent with State law and otherwise guarantees due process of law, a municipality adopting section 458(9), 458-a(8), or both, is seemingly free to develop its own implementation methodology. This methodology, like that of section 467(9), could include provisions authorizing amendment of the assessment roll when the transfer occurs between taxable status date and tax levy and a mechanism for tax refunds or credits when the transfer occurs after tax levy. However, because the computation of the prorated transferred veterans exemption should be a simple arithmetic process applied to a previously computed exemption amount (as opposed to one involving a new assessed value and the concomitant right to review thereof), a municipality might wish to consider using the established correction of errors procedures of title three of Article five of the RPTL.

That is, the local law, ordinance, or resolution adopting the new option(s) could provide that the prorated transferred exemption amount be treated as though it were a “clerical error,” perhaps as defined in section 550(2)(c) of the RPTL. {2}  Doing so obviates the need to establish elaborate implementation procedures, existing procedures (which reflect due process of law) already being in place and familiar to assessment officials. {3}  In this way, the assessor could petition the board of assessment review to change the tentative roll (per RPTL, § 552) or final roll (per RPTL, § 553) to add the prorated transferred veterans exemption to the roll before taxes are levied. Likewise, after levy, by filing with the county director, the taxpayer could seek a corrected tax bill (per RPTL, § 554) or a tax refund/credit (per RPTL, § 556).

{Note}:  Chapter 538 of the Laws of 2015 amended RPTL, § 458-a(8) to allow the alternative veterans exemption to be transferred when a veteran purchases replacement property within the same county (or in the case of New York City, within the city). 

August 16, 2007

{1}  The new provisions are to be distinguished from the former provisions of subdivision five of section 458 of the RPTL (added L.1979, c.134 and repealed L.1994, c.410), often referred to as the pro rata veterans exemption, which we discussed in several of our opinions (e.g., 6 Op.Counsel SBEA Nos. 67, 110; 7 id. No. 66; 9 id. Nos. 26, 102).

{2}  That provision defines a “clerical error” as including: “an incorrect entry of assessed valuation on an assessment roll or on a tax roll for a parcel which, except for a failure on the part of the assessor to act on a partial exemption, would be eligible for such partial exemption.”

{3}  We recognize that some assessors might object to a characterization of the grant of a prorated transferred veterans exemption as being any type of “error,” the assessor not having made an error. The benefit of using existing law seemingly outweighs such an objection, but the municipality might be sensitive to such possible reaction in the language it uses in its local authorization.