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Volume 5 - Opinions of Counsel SBEA No. 63

Opinions of Counsel index

Foreign governments exemption (generally) (liability for tax liens) - Real Property Tax Law, § 418:

A foreign government, the real property of which is exempt from taxation pursuant to section 418 of the Real Property Tax Law, is liable for taxes which had become a lien as of the date title to the parcel was transferred to the foreign government, but exempt from taxes which became a lien after such date. No formal application for exemption is required to be filed as a prerequisite to receiving an exemption pursuant to section 418.

We have received an inquiry concerning real property owned by a foreign government which is a member nation of the United Nations. It appears that the government took title to a parcel on August 29, 1975 (between taxable status and lien dates), and that since that date, such property has been used exclusively as a residence of a representative of the government with the rank of ambassador. We are asked a number of questions concerning the taxable status of the real property.

Subdivision 1 of section 418 of the Real Property Tax Law provides as follows:

Real property of a foreign government which is a member of the United Nations or any world-wide international organization as defined in section four hundred sixteen of this chapter, the legal title to which stands in the name of such foreign government or the principal resident representative or resident representative with the rank of ambassador or minister plenipotentiary of such foreign government to the United Nations or other such world-wide international organization, used exclusively for the purposes of maintaining offices or quarters, for such representatives, or offices for the staff of such representatives, shall be exempt from taxation, except levies made on a city-wide or borough-wide basis which are collectible with the real property tax, and special ad valorem levies to the extent provided in section four hundred ninety of this chapter. If a portion only of any lot or building of any such government or representative is used exclusively for the purposes herein described, then such portion only shall be exempt and the remainder shall be subject to taxation unless otherwise exempt from taxation by law. The exemption granted by this section shall apply to taxes which become due and payable after the date such property is used for the purposes herein stated, and shall continue with respect to such property as long as it remains the property of such government and is used for the purposes herein stated and no longer.

The first question is what documents need to be submitted to substantiate the exemption. In construing subdivision 20-a of section 4 of the Tax Law (predecessor statute to §418), the State Comptroller stated that:

It is the opinion of this department that such an exemption is automatic and that, without a specific provision requiring the filing of a verified application for the exemption of such real property, one need not be presented, to the town assessors by the foreign government. . . . Since the town assessors presumably would have notice that the foreign government now owned the real property . . . and it is clear from its name that it is entitled to an exemption, an application would serve no useful purpose (14 Op.State Compt. 27).

Thus, assuming that the assessor is satisfied that the real property is owned by the foreign government and is being used for the purposes stated in section 418, he should grant the exemption.

The next question is for which taxes, if any, the real property is liable. The Attorney General has stated:

Ordinarily an exemption from real property taxation is governed by the ownership and condition of the property as of the date of taxable status, but the Legislature, in enacting §418 of the Real Property Tax Law (formerly subdivision 20-a of §4 of the Tax Law) saw fit to specify that the exemption therein provided should apply to “taxes which become due and payable after the date such property is used for the purposes herein stated”.

The language of the statute is plain and unequivocal and indicates beyond any question that the exemption is to take effect immediately regardless of the date of taxable status and applies to taxes which become due and payable after the qualification of the property therefor, i.e., after such property is used for the purposes set forth in the statute (1962, Op.Atty.Gen. 173).

Accordingly, it is our opinion that the real property in question is liable for taxes which became a lien prior to August 29, 1975, and is not liable for taxes which became a lien after such date.

Finally, it is to be noted that the property should be listed on the exempt portion of the assessment roll to be tentatively filed June 1, 1976.

December 16, 1975

Updated: