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Volume 7 - Opinions of Counsel SBEA No. 7

Opinions of Counsel index

Assessment review (tax certiorari proceeding) (sales data) - Real Property Tax Law, §§ 302, 720:

Where a petitioner in an inequality proceeding seeks to introduce evidence of actual sales to establish the ratio of assessed value to fair market value in general, only sales from the twelve-month period preceding taxable status date may be used. To establish the fair market value of the petitioner’s property, sales after taxable status date may be considered.

We have been asked to clarify the time period referred to in subdivision 3 of section 720 of the Real Property Tax Law, which permits either party, in a proceeding to review an assessment on the ground of inequality, to introduce in evidence “actual sales of real property within the assessing unit that occurred during the year in which the assessment under review was made” (emphasis added).

In proving an inequality case, the petitioner is faced with a two step process. First, he must prove a proper ratio of assessed value to fair market value of real property in general in the assessing unit. Thereafter, he must establish the fair market value of his property. The fair market value of his property is multiplied by the ratio so established to yield the proper assessed valuation (Ed Guth Realty, Inc. v. Gingold, 34 N.Y.2d 440, 315 N.E. 2d 441, 358 N.Y.S.2d 367 (1973)).

Where the petitioner opts to meet his burden of proof by the introduction of actual sales, the time periods within which the sales must have occurred differ between the two steps. In establishing the proper ratio of assessed value to the fair market value of property in general, the petitioner is limited to the twelve-month period immediately preceding the taxable status date of the assessing unit and not the fiscal year or the so-called tax year. This issue was directly addressed by the court in Mascioli v. Town of Babylon, 168 N.Y.L.J. 21, col. 8 (11/21/72). The court read section 720(3) in conjunction with section 302 of the Real Property Tax Law and reasoned that since a taxpayer who improved his property after the taxable status date could not have his assessment increased thereby for the next tax bill, then the year referred to in section 720(3) necessarily refers to the twelve-month period prior to the taxable status date. The court stated that “the ‘year in which the assessment is made’ is the twelve month period prior to the tax status date and not the fiscal year or the actual tax year” (id., 22, col. 1).

In Mid-Island Shopping Plaza, Inc. v. Podeyn, 25 Misc.2d 972, 204 N.Y.S.2d 11 (S. Ct., Nassau Co., 1960), aff’d, 14 A.D.2d 571, 218 N.Y.S.2d 249 (2d Dept., 1961), aff’d, 10 N.Y.2d 966, 180 N.E.2d 63, 224 N.Y.S.2d 283 (1961), the court focused upon the twelve-month period immediately preceding the taxable status date for each year in question in establishing the ratio of assessed valuation to actual value prevailing in the county. The court accepted as evidence recorded sales dated between May 1, 1956 and April 30, 1957, the taxable status date being May 1 for each year (204 N.Y.S.2d at 14, 15).

It is only in the second step of the process, where the petitioner must prove the fair market value of his property, that sales after the taxable status date are considered. These sales may be considered if they shed light upon the actual value of the subject property as of the taxable status date (Four Park Avenue Corp. v. Lilly, 265 App. Div. 68, 37 N.Y.S.2d 733 (1st Dept., 1942); People ex rel. Railroad Federal Savings and Loan Ass’n v. Halpin, 4 A.D.2d 956, 167 N.Y.S.2d 736, rev’d on other grounds, 5 N.Y.2d 925, 156 N.E.2d 811, 183 N.Y.S.2d 285 (1969)).

Consequently, where a petitioner in an inequality proceeding seeks to introduce evidence of actual sales within the assessing unit pursuant to section 720(3) of the Real Property Tax Law to establish a proper ratio of assessed value to fair market value, such sales are limited to those occurring within the twelve months prior to the assessing unit’s taxable status date and not those within the fiscal year or the actual tax year.

March 30, 1979

Updated: