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Volume 2 - Opinions of Counsel SBEA No. 13

Opinions of Counsel index

Municipal corporations exemption (village parking lot) - Real Property Tax Law, § 406:

A vacant lot acquired by a village for use as a village parking lot is entitled to an exemption as of the next succeeding taxable status date if the village can demonstrate that plans have been or are being made to use the property for the purpose for which it was acquired within a reasonable period of time, and if any income derived from such use is merely incidental.

Our opinion has been requested as to the taxable status on the town assessment roll of a vacant lot purchased by a village in September, 1971, for use as a village parking lot.

Section 406 of the Real Property Tax Law provides that real property owned by a municipal corporation located within its corporate limits and held for a public use shall be exempt from taxation and from special ad valorem levies and special assessments to the extent provided in section 490 of the Real Property Tax Law. Real property acquired by a municipal corporation for use as a parking lot is “held for public use” within the meaning of section 406 (see, County Dollar Corporation v. City of Yonkers, 47 Misc.2d 627, 263 N.Y.S.2d 33).

Where taxable real property is acquired by a municipal corporation for a public use after taxable status date, the property remains liable for local real property taxes on the assessment roll prepared as of such taxable status date, and the property should not be listed on the exempt portion of the assessment roll until the roll is prepared based upon the taxable status date occurring after the date of acquisition (see, 10 Op.State Compt. 316).

If the real property in question is not in fact used as a parking lot on the next succeeding taxable status date, it would nevertheless be entitled to exemption if the village can demonstrate that the property was acquired for parking lot purposes and that plans have been or are in the process of being made to use the property for such purpose and that the property will be so used within a reasonable period of time.

Real property owned by a municipal corporation and located within its limits is entitled to exemption if it is devoted to a public use although the municipal corporation receives incidental income from such property (see, 16 Op.State Compt. 186). For example, it has been held that county-owned real property used as a meter parking lot and located in a city within a county is exempt from taxation (see, 17 Op.State Compt. 304).

Therefore, if the provisions of section 406 are satisfied as discussed above, then the property will be entitled to an exemption on the town assessment roll which is prepared on the basis of the taxable status date next succeeding the date of purchase by the village.

May 10, 1972

Updated: