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Volume 4 - Opinions of Counsel SBEA No. 119

Opinions of Counsel index

Farm structures and buildings exemptions (rollback taxes) (generally) - Real Property Tax Law, § 483:

If during the period of exemption authorized by section 483 of the Real Property Tax Law, the building or structure or land is converted to a nonfarm use, the exemption is lost and rollback taxes are to be levied on the next assessment roll. If the property is not actually converted to a nonfarm use, but lies idle or becomes inoperative the exemption is also lost.

We have received an inquiry concerning the exemption from real property taxation of structures and buildings essential to the operation of agricultural and horticultural lands as provided by section 483 of the Real Property Tax Law.

Section 483 provides for a five-year tax exemption on certain new or reconstructed structures or buildings essential to the operation of agricultural and horticultural lands. It applies to constructions or reconstructions completed after January 1, 1969 and before January 1, 1979. The exemption is granted upon application filed by the owner of the property prior to the appropriate taxable status date.

The question specifically concerns the collection of rollback taxes. Subdivision 8 of section 483 provides for the collection of such taxes whenever, during the period of exemption, the land or buildings or structures in question “. . . are converted to non-agricultural or non-horticultural use . . .”. The exemption may be terminated prior to the expiration of the five-year period for either of two reasons, viz., (1) if the building or structure ceases to be used and occupied to carry out farming operations, or (2) if the land or building or structure is converted to non-agricultural or non-horticultural use. In the event of conversion to a non-farming use, the property upon which an exemption was granted will be subject to the taxes which would have been paid had there been no exemption. In those situations in which the property is subject to rollback taxes, such taxes are levied and collected on the first assessment roll after conversion to a nonfarm use for the period an exemption was allowed, not to exceed five years. The property itself is subject to rollback taxes, irrespective of who owns the property at the time rollback taxes are levied.

Accordingly, where an exemption has been allowed and there is a conversion of the building or land to non-agricultural or non-horticultural use, on the next subsequent assessment roll, the property is not eligible for exemption, and rollback taxes are to be levied and collected. Where the property is not in fact actually converted to a non-farm use, but rather lies idle or becomes inoperative, the exemption is lost. However, whether or not rollback taxes are to be imposed would have to be determined by the assessor on a case-by-case basis. Rollback taxes must be imposed where there is some outward act indicating that the property is in fact or in the process of being converted.

April 18, 1975

Updated: