Volume 3 - Opinions of Counsel SBEA No. 81
Aged exemption (ownership requirement) (transfer of tide by nonresident joint owner to resident joint owners) (intestate distribution) - Real Property Tax Law, § 467:
A transfer of interest in real property by a nonresident owner of a concurrent estate to resident owners effects a break in the chain of title, and for purposes of this exemption, the required five-year period of ownership will begin running anew. In computing length of ownership, the period of ownership by an intestate spouse survived by a widow and offspring who renounce their distributive shares may be combined with the period of sole ownership by the widow.
Our opinion has been requested concerning the partial real property tax exemption authorized by section 467 of the Real Property Tax Law. The property in question passed by intestacy in 1956 to three daughters, two of whom presently reside there. Specifically, there is a question as to whether a transfer now by the third daughter to the other two will satisfy the five-year ownership requirement of section 467 (since the other two have lived there some 17 years). The three daughters all meet the age requirement of the exemption statute.
A transfer of interest in real property by a nonresident owner of a concurrent estate to resident owners effects a break in the chain of title, and for purposes of section 467, the required five-year period of ownership will begin running anew (1 Op. Counsel SBEA Nos. 41, 110; 2 Op.Counsel SBEA Nos. 55, 83). Where the statutory length of ownership requirement is satisfied, an exemption may be allowed on such jointly held property if in addition at the time of filing application for exemption all of the joint owners are 65 years of age or over, occupy the property as their legal residence and their combined income does not exceed the ceiling set by a granting municipality (1 Op.Counsel SBEA No. 110; 2 Op.Counsel SBEA No. 59).
Accordingly, in the event that the nonresident sister should transfer her interest in the property to her two other sisters, the exemption could not be allowed until five years had expired from the time of such transfer. Also, under the present title, since one of the joint owners does not occupy the property, an exemption may not be allowed.
Property of a decedent not disposed of by a will must be distributed under the law of intestate distribution. Under such law, where there is a surviving widow and children a distributive share of an intestate decedent’s estate passes to each of the survivors, and, for purposes of section 467, an exemption may not be allowed because each of the distributees generally do not meet the age, legal residence, occupancy and income provisions of section 467 and the statutory length of ownership has not been satisfied under the new joint title. In the instant situation the joint title acquired by the three sisters in 1956 under the law of intestacy does satisfy the length of ownership requirement of section 467 and an exemption could be allowed on the subject property provided that each of the three sisters satisfies the remaining requirements of section 467 as to age, legal residence, occupancy and income.
While not relevant to the subject inquiry, it should be noted that since 1965 a person entitled to a distributive share of an intestate may renounce his inheritance (L.1964, c.94). The effect of such act, now provided for in section 4-1.3 of the Estates, Powers and Trusts Law, is to treat the property as if it had never passed to the renouncing distributee. In this connection, section 467 provides a special exception to a surviving spouse who acquires sole title by virtue of devise by or descent from a deceased spouse whereby the period of prior ownership may be combined with the period of present ownership to satisfy the length of ownership requirement. Thus, in the above example of the surviving widow and children, were the children to renounce their distributive share, the widow would become sole owner by descent and the time of prior ownership by the deceased husband could be considered in satisfying the length of ownership requirement of section 467.
November 21, 1973
NOTE: This Opinion was superseded by Opinion 12-35.