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Volume 2 - Opinions of Counsel SBEA No. 20

Opinions of Counsel index

Veterans’ exemption (review of applications by town assessor) (recovery of taxes on erroneously granted exemptions) - Real Property Tax Law, § 458:

A town assessor may review veterans’ exemption applications at any time to determine whether the applicant is a member of the exempt class or whether the moneys claimed to have been used in the purchase of the property actually constitute eligible funds. The application may not be reviewed, however, for the purpose of determining whether or not such funds were actually used in the purchase of the property.

There is no procedure for recovering taxes which would have otherwise been due in cases where the exemption was erroneously granted in the past.

          We have received a request for information as to the extent to which existing veterans’ exemptions may be reviewed by town assessors and as to whether there is any procedure whereby the town could recover taxes which would have otherwise been due and payable in cases where the exemption was erroneously granted in the past.

Paragraph 3 of subdivision 1 of section 458 of the Real Property Tax Law provides that the amount of the exemption “. . .shall be made and continued in each assessment of the property so long as it is exempt from taxation for any purpose . . . ”.

A town assessor may at any time review veterans’ exemption applications to determine whether the owner of the property is one of the persons described in the statute as qualifying for the exemption and to determine whether the moneys claimed to have been used in the purchase of the property actually constituted eligible funds. However, having once granted the exemption, neither the assessor nor his successor may review the application for the purpose of determining whether or not such funds were actually used in the purchase of the property (see, In re Hastings, 165 Misc. 211, 300 N.Y.S. 961).

For example, if the application lists moneys which do not constitute eligible funds, and an exemption was granted on the basis of such moneys, the assessor could reduce the amount of the exemption accordingly since the application on its face shows that the exemption, to that extent, was granted erroneously. This would also apply to subsistence allowance moneys in excess of the amount thereof which constitute eligible funds.

There would be no undue hardship upon a property owner to require him to substantiate that he is a “member of the exempt class” or that funds listed in his application actually constituted “eligible funds”. He would be able to obtain the required information without much difficulty from his local veterans’ administration office. However, it could cause undue hardship to require additional proof of the use of such funds in the purchase of the property, especially in cases where the application is being reviewed a number of years after the actual purchase of the property. Records substantiating such use could be lost or destroyed or, in the case of many lending institutions, records concerning the deposit and withdrawal of such funds in a savings account and the application of such funds to a purchase money mortgage are not readily obtainable.

In the case of existing exemptions, it must be assumed that an application had previously been filed. If the present assessor is unable to locate some of the applications, he may require the property owners to submit new applications but any determination concerning such applications would be limited as set forth above.

Since the exemption authorized by section 458 is a partial exemption, if it was erroneously granted in the past, there is no procedure to recover any amount of taxes which would have been payable had such exemption not been granted. The provisions of section 550 of the Real Property Tax Law with respect to treating as an omitted assessment taxable real property which was listed on the assessment roll as exempt applies only to total exemptions from taxation.

June 6, 1972

Updated: