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Volume 5 - Opinions of Counsel SBEA No. 9

Opinions of Counsel index

Nonprofit organizations exemption (charitable) (single family low-income housing) - Real Property Tax Law, § 421:

The taxable status of a housing project owned by a nonprofit organization organized for charitable purposes depends on whether or not the project is used exclusively for such purposes.

Our opinion has been requested as to whether or not several single family dwellings owned by a not-for-profit corporation to provide low-income housing is entitled to a tax exemption under section 421 of the Real Property Tax Law.

Apparently the corporation purchased these dwellings pursuant to the following powers contained in paragraphs B 1 and 2 of its certificate of incorporation, viz.:

Demonstration by specific project or projects of rehabilitation or construction or both of dwelling units of varying amounts and types, and appurtenant facilities and structures, for sale or rent, utilizing conventional F. H. A. or other financing, how blighted, deteriorating or threatened urban areas can be improved by private enterprise and home ownership.

Provision of adequate housing by private capital and enterprise for persons who otherwise have insufficient funds or income to acquire such housing for themselves and to assist such persons to acquire and maintain such housing.

The corporation claims that no member has received any pecuniary profit and the members have paid any deficiencies incurred in the operation of these dwellings.

In a prior opinion (1 Op.Counsel SBEA No. 55), we concluded that the taxable status of housing owned by a nonprofit organization organized for charitable purposes depended upon whether or not the housing project was being used in fact exclusively for “charitable” purposes. This is a question of fact, the relevant factors of which we set forth in such opinion.

Since we rendered this opinion, two courts have considered this very question, discussed in some detail the meaning of “charity” as related to housing, and concluded on the facts before them that the projects were not so involved (Matter of Bedford-Stuyvesant Restoration Corp., 172 N.Y.L.J. No. 23, p. 11, col. 2,(8-l-74); aff’d, 50 App. Div.2d 815, 376 N.Y.S.2d 912; Matter of 141 Parkhill Corp., 173 N.Y.L.J. No. 48, p. 16, col. 6 (3-12-75)). These cases should be of assistance to local officials in getting additional information from corporations in order to determine the “charity” issue.

April 17, 1975

Updated: