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Volume 3 - Opinions of Counsel SBEA No. 26

Opinions of Counsel index

Veterans’ exemption (eligible funds) (death pension benefits) (dependency allowance) - Real Property Tax Law, § 458:

Proceeds from a “pension, bonus or insurance” paid to a veteran’s widow by the U. S. Government constitute eligible funds under section 458 of the Real Property Tax Law; moneys paid as a “dependency allowance”, however, are not eligible funds.

Our opinion has been requested concerning the situation in which a widow of a deceased veteran received in excess of $5,000 “death pension benefits” on behalf of her children. She has been receiving these benefits since 1960 and was advised by the Veterans’ Administration that she could use the money as she saw fit. She applied such moneys toward the principal balance of a purchase money mortgage on real property owned by her, and the question becomes whether she would be entitled to a veterans’ exemption under such circumstances.

Subdivision 1 of section 458 of the Real Property Tax Law provides that real property purchased with the proceeds of a “pension, bonus or insurance” paid by the United States Government or the State of New York for military or naval services is exempt from taxation to the extent of such moneys so used, not to exceed $5,000.

If the moneys in question constituted proceeds of a National Service Life Insurance policy, such moneys would constitute eligible funds and would qualify for purposes of this exemption.

However, if such moneys were paid to the widow as a “dependency allowance” such moneys would not constitute eligible funds for purposes of this exemption.

May 7, 1973

Updated: