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Volume 6 - Opinions of Counsel SBEA No. 11

Opinions of Counsel index

Business investment exemption (scope) (mobile home park) - Real Property Tax Law, § 485-b:

A mobile home park is ineligible for the exemption authorized by the provisions of section 485-b of the Real Property Tax Law.

We have been asked if the partial exemption authorized by section 485-b of the Real Property Tax Law is applicable to a mobile home park.

Section 485-b provides, in summary, that real property which has been improved subsequent to July 1,1976, for the purposes of commercial business or industrial activity, may receive a partial exemption from taxation and special ad valorem levies for a ten-year period. The exemption equals 50 percent of the increase in assessed value attributable to the new improvements the first year, decreasing by 5 percentage points each year thereafter for nine years. Any of the municipalities in which the property is located may opt to reduce the percentage of exemption.

Subdivision 5 of section 485-b expressly provides:

5. The provisions of this section shall apply to real property used primarily for the buying, selling, storing or developing goods or services, the manufacture or assembly of goods or the processing of raw materials. This section shall not apply to property used primarily for the furnishing of dwelling space or accommodations to either residents or transients other than hotels or motels.

While the statute authorizes the granting of an exemption with respect to real property improved for the purpose of commercial activity, and it may be conceded that the development of a mobile home park is a commercial venture, in order to qualify for exempt status, the property must also be used primarily for the purposes set forth in subdivision 5. Subdivision 5 by express language excludes property used for the furnishing of dwelling space or accommodations to residents (other than hotels or motels). We interpret this statutory language to mean that an exemption may be authorized only where so-called “residential” property is used primarily as a hotel or motel. A mobile home park is neither a hotel nor a motel and, therefore, based on the rule of strict construction, which must be given to all exemption statutes (see, Herkimer County v. Village of Herkimer, 251 App. Div. 126, 295 N.Y.S. 629, aff’d, 279 N.Y. 560. 18 N.E.2d 854), it is our opinion that such property is ineligible for the exemption authorized by the provisions of section 485-b.

March 31, 1977

Updated: