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Volume 11 - Opinions of Counsel SBRPS No. 87

Opinions of Counsel

First-time homebuyers of newly constructed homes exemption (scope) (mobile homes) - Real Property Tax Law, § 457:

Mobile homes are not eligible to receive the first time homebuyers of newly constructed homes exemption, but the fact that a mobile home may have been located on land on which a one or two family house is thereafter constructed does not disqualify that house from receiving such exemption.

We have received an inquiry concerning the first-time homeowners of newly constructed homes exemption (Real Property Tax Law, §457). An applicant owns a parcel of land on which he previously placed a mobile home for which he has received a school tax relief [STAR] exemption (RPTL, §425) for several years. Now, he has constructed a new house on the parcel, and the question is if it may qualify for exemption under section 457. In our opinion, it may.

As we noted in 11 Op.Counsel SBRPS No. 23, “Section 457 authorizes municipalities to offer a partial exemption for newly constructed homes purchased by first-time homebuyers. The exemption is also available for certain improvements made to existing homes.”

The answer to the question presented appears to be found in the statute’s definitions. Section 457(9) provides:

9. For purposes of this section:
(a) “first-time homebuyer” means a person who has not owned a primary residential property and is not married to a person who has owned a residential property during the three-year period prior to his or her purchase of the primary residential property, and who does not own a vacation or investment home.

(b) “Primary residential property” means any one or two family house, townhouse or condominium located in this state which is owner occupied by such homebuyer.

(c) “Newly constructed” means an improvement to real property which was constructed as a primary residential property, and which has never been occupied and was constructed after the effective date of this section. “Newly constructed” shall also mean that portion of a primary residential property that is altered, improved or reconstructed.

The definition of principal importance to the instant question is that in paragraph (b) above. Primary residential property for purposes of section 457 is limited to one or two family houses, townhouses, and condominiums. While it is true that mobile homes may qualify as residences and even receive STAR exemptions (RPTL, §425(2)(l)), they do not appear to qualify for exemption under section 457. {1}

By the same token then, the fact that a mobile home may have been located on land on which a one or two family house is thereafter constructed should not disqualify that house from receiving the section 457 exemption. {2}  Assuming, therefore, that the house in question otherwise satisfies the criteria of section 457 (e.g., it is owner occupied), in our opinion, it may receive that exemption despite the fact that a mobile home was previously (and perhaps still is) located on the property. {3}

April 24, 2006


{1}  In the aforementioned 11 Op.Counsel SBRPS No. 23, we noted: “It seems self-evident, however, that section 457 is intended, at least in part, as a stimulus to the building trades.” It seems unlikely that the Legislature intended that this exemption benefit mobile homes, which may have been manufactured in whole or in part outside this State. Presumably, any mobile home manufacturing plants located within this State may qualify for the business investment exemption (RPTL, §485-b) if that exemption is locally available for such manufacturing plants.

{2}  That is, were we to conclude that the mobile home qualified for the exemption, its owner would need to sell the same and wait three years before he or she could again satisfy the definition of “first-time homebuyer” (RPTL, §457(9)(a)).

{3}  Assuming that the mobile home remains in place, of course, once the owner moves into his new house, the owner’s STAR eligibility will be limited to his house.

Updated: