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Volume 2 - Opinions of Counsel SBEA No. 45

Opinions of Counsel index

Urban Development Corporation (exemption from taxation) - McK. Unconsol., §§ 6265, 6272:

If title to real property is vested in the Urban Development Corporation, the property is exempt from taxation, including school taxes, pursuant to section 6272. If title is in a subsidiary, the exemption may be limited, pursuant to section 6265.

Our opinion has been requested concerning the taxable status of real property in a village acquired by the New York State Urban Development Corporation for eventual use for housing units. Since development of the housing units will take several years, the question is whether the Urban Development Corporation will pay the equivalent of school taxes during the interim.

The Urban Development Corporation was established in 1968 by chapter 174 of the Laws of 1968 (McK. Unconsol., § 6251 et seq.).

Section 6272 of the Unconsolidated Laws provides as follows:

“§ 6272. Exemption from taxation

“The exercise of the powers granted by this act will be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare and prosperity, and for the improvement of their health and living conditions, and will constitute the performance of an essential governmental function and the corporation and its subsidiaries shall not be required to pay any taxes, other than assessments for local improvements, upon or in respect of a project or of any property or moneys of the corporation or any of its subsidiaries, levied by any municipality or political subdivision of the state, nor shall the corporation or its subsidiaries be required to pay state taxes of any kind, and the corporation, its subsidiaries, projects, property and moneys and, except for estate and gift taxes and taxes on transfers, any bonds or notes issued under the provisions of this act and the income therefrom, shall at all times be free from taxation of every kind by the state and by the municipalities and all other political subdivisions of the state.”

However, section 6265 contains further provisions with respect to residential projects of the Urban Development Corporation:

§ 6265. Special provisions relating to residential projects

* * *

“(3) Notwithstanding any other provision of this act, projects of a subsidiary organized pursuant to articles two, four or eleven of the private housing finance law shall be exempt from real property taxes to the extent and in the manner provided by applicable law. (emphasis supplied)

The extent of the exemption attaching to the property depends on whether the property in question is actually vested in the Urban Development Corporation or in a subsidiary. If the title is vested in the Urban Development Corporation, the property would be exempt from taxation, including school taxes, pursuant to section 6272. If title is in a subsidiary, the exemption may be limited, pursuant to section 6265.

July 13, 1972

Updated: