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Volume 11 - Opinions of Counsel SBRPS No. 12

Opinions of Counsel index

School tax relief [STAR] exemption (residence requirement); Senior citizens exemption (residence and occupancy requirement) (occupancy by remainderman during life tenant’s confinement in nursing home) - Real Property Tax Law, §§ 425, 467:

Where a life tenant is confined to a nursing home, occupancy of the life tenant's home by the (non-spouse) remainderman disqualifies such home from eligibility for the school tax relief [STAR] or senior citizens exemption.

Our opinion has been requested concerning the senior citizens exemption (Real Property Tax Law, § 467) and the enhanced school tax relief [STAR] exemption (RPTL, § 425(4)). The facts are that a life tenant owner of property has been confined to a nursing (or rehabilitation) home since 1997. His son, who is the remainderman (i.e., the person who will become owner upon the death of the life tenant), argues that it is his father’s intent to return to the home when he is released from his confinement, and that the property should continue to receive the exemptions during his absence. In the meantime, the son is occupying the property. In our opinion, given these facts, the exemptions should not be continued.

In 10 Op.Counsel SBRPS No. 69, we discussed both the former and current provisions of section 467(3)(d) of the RPTL concerning the residency of an applicant for the exemption. Of specific relevance to this inquiry, we noted the amendment of that provision by chapter 440 of the Laws of 1985. In relevant part, that law now provides that no exemption may be granted:

unless the real property is the legal residence of and is occupied in whole or in part by the owner or by all of the owners of the property: except where . . . an owner is absent from the residence while receiving health-related care as an inpatient of a residential health care facility, as defined in section [2801] of the public health law . . . and provided further, that during such confinement such property is not occupied by other than the spouse or co-owner of such owner (emphasis added).

The enhanced STAR exemption includes a similarly worded provision (RPTL, § 425(4)(c)).

Here, we assume that the father is confined in a facility within the purview of section 2801 of the Public Health Law so his absence from the residence is excused for purposes of the two exemptions. In our opinion, however, based upon the emphasized portion of the above-quoted section 467(3)(d) and section 425(4)(c), the property is ineligible for the exemptions because of the son’s occupancy thereof.

That is, although the son has a legal interest in the property, his is a future interest; he is not the "co-owner" of the property within the meaning of the statutes.

During the lifetime of the life tenant, the life tenant is the exclusive owner of the land so held by him, with the exclusive right to its possession, control, and enjoyment[,] subject only to certain well-defined limitations or duties, even to the exclusion of the reversioner or remainderman. The owner of the reversion or remainder in fee has no present right of enjoyment, and no tangible and physical ownership of the land. He merely has a future incorporeal interest or estate in the land which will ripen into ownership of the land itself on the death of the life tenant, and he can do nothing to affect the life estate (Rasch, New York Law and Practice of Real Property (2d ed.), § 6:13; accord: Warren’s Weed, New York Real Property, "Life Estates," § 1.01(1); 56 NY Jur2d, Estates, Powers, etc., § 201). {1}

The son’s occupancy of the property violates the restricted occupancy provision of sections 467(3)(d) and 425(4)(c), so, in our opinion, the property may receive neither exemption.

June 5, 2001

{1}   Were the son the co-owner, this would likely defeat the exemption as well since both statutes require that all of the owners be at least 65 years of age, with exceptions for spouses and siblings only (RPTL, §§ 467(1)(a), 425(4)(a)(i)).