Volume 7 - Opinions of Counsel SBEA No. 65
Aged exemption (residence and occupancy requirement) (farmland and other large tracts) - Real Property Tax Law, §§ 467,1802, 1903; 9 NYCRR 190-3.2, 190-4.2:
An aged exemption may be granted to a portion of a large tract to the extent that it is used exclusively for residential purposes. The exemption may be granted when the residential part of the property is separately assessed or, where the assessment roll is prepared in compliance with the rules of the State Board implementing Articles 18 and 19 of the Real Property Tax Law, the exemption may be granted to the residential part of the assessment of a parcel properly entered on the assessment roll.
Section 467(3)(c) of the Real Property Tax Law provides that no aged exemption may be granted “unless the property is used exclusively for residential purposes”. In fact, this provision involves two tests, the first whether the use is “residential” and the second whether that use is “exclusive” (cf., 7 Op. Counsel SBEA No. 16; Matter of Rochester Christian Church v. State of N. Y. Public Service Commission, 55 N.Y.2d 196, 433 N.E.2d 132, 448 N.Y.S.2d 149 (1982)). It is our opinion with respect to large tracts of land that the term “residential” as used in this statute is limited to that amount of land reasonably necessary for such purpose. In attempting to determine what is and what is not “residential” in the case of a large tract, which includes large estates, farmland or vacant land, many assessors use the minimum zoning requirements of their locality as a measure of what constitutes the “residential” portion of such land.
Where the owner of a large tract applies for an aged exemption, we have stated that if the residential portion of the tract is capable of being separately assessed and is so assessed, an aged exemption may be granted to that residential parcel (see, 2 Op. Counsel SBEA Nos. 14, 17; 7 id. No. 16). Division of a large tract requires the entry on the assessment roll of the two separately described parcels, maintenance of two property record cards, two tax map numbers (where tax maps are used), the levy of two separate taxes and the issuance of two separate tax bills.
However, due to the enactment of Chapter 1057 of the Laws of 1981, it is our opinion that, under certain circumstances, it is no longer necessary for an assessor to divide a large tract into two parcels in order to grant an aged exemption to the residential portion, although that procedure may be continued. If the assessor is identifying portions of large tracts as either “class one” or “homestead” per Articles 18 and 19, respectively, he need not separately assess as two parcels in order to grant such exemption.
Pursuant to section 1802 of the Real Property Tax Law, assessors in special assessing units (i.e., New York City and Nassau County) must identify each parcel by class in the preparation of their assessment rolls in the manner provided by law. “Class one” property is defined (Real Property Tax Law, §1802(1); 9 NYCRR 190-3.l(e)) as one, two and three-family residential real property, with farm dwellings being included within the definition of “residential real property” (Real Property Tax Law, §1801(b)). Consistent with our interpretation of the term “exclusively residential” in section 467, we have concluded that in the case of large tracts, which include a one, two or three family residential structure, the assessor must determine what part of the tract is reasonably incidental to the use of the property for residential purposes. (However, for these purposes, we have imposed a ten acre maximum as “residential” land (see, 9 NYCRR 190-3.l(e)(l), 190-4.1(j)).)
In regard to the manner in which the assessor should describe such properties, the State Board’s rules to implement Article 18, provide, in part, that
[The] assessor shall also include a separate entry on the assessment roll where only a part of a parcel is to be included in class one and the parcel identification shall be supplemented by a unique suffix for each separately entered part. Where separate entries for parts of a parcel are entered on an assessment roll pursuant to this subdivision, the total assessed value of the parcel shall be listed, and, only one tax bill shall be issued for the entire parcel. (9 NYCRR 190-3.2(a)).
Thus, assessors in special assessing units will hereafter be identifying residential portions of property for purposes of Article 18. In our opinion, this classification process will also provide sufficient identification for purposes of section 467.
In all other assessing units, which are subject to the provisions of Article 19, the “homestead class” properties must be identified (see, Real Property Tax Law, §1903; 9 NYCRR 190-4.2(a)). Similar to “class one” properties for purposes of Article 18, “homestead class” properties for purposes of Article 19 are defined as all one, two or three family dwelling residential real property, including farm dwellings (Real Property Tax Law, §1901(e)). Again, where only a part of a parcel qualifies within the definition of the “homestead class,” it must be so designated on the assessment roll (9 NYCRR 190-4.2(c)). Accordingly, the State Board’s rules require that the assessment roll include information for each separately entered part of a parcel, and a separate entry for homestead class purposes where only a part of the parcel is included within that class. Specifically, the rule provides, in part,
[T]he assessment roll shall contain a separate total assessed value and taxable assessed value for each separately entered part. Where separate entries for parts of a parcel are entered on an assessment roll pursuant to this subdivision, a combined total assessed value and combined taxable assessed value of the parcel shall also be listed and, only one tax bill shall be issued for the entire parcel (9 NYCRR 190-4.2(c)).
Although classification of the assessment roll in special assessing units will be required on the 1982 assessment roll (9 NYCRR 190-3.2(a)), classification of assessment rolls in assessing units other than special assessing units will not be required until 1984 (9 NYCRR 190-4.2(a)), unless the assessing unit receives approved assessing unit status (Real Property Tax Law, §1902) based on an earlier assessment roll. Once a “class one” or “homestead” classification is entered on the assessment roll pursuant to State Board rules, an aged exemption may be granted to that part of a parcel representing the residential part, while the remaining part of the parcel will not receive the benefit of the exemption. The two parts will thereafter be combined into a single parcel to be listed on the assessment roll and tax roll and for which a single tax bill will be issued.
March 24, 1982
NOTE: Construes law prior to L.1985, c.440 and L.1992, c.767. Subpart 190-4 of the State Board rules have since been amended to require classification of assessment rolls in special assessing units and approved assessing units. Other assessing units have the option of classifying their rolls (9 NYCRR 190-1.3(c)), enabling them to grant aged exemptions in accordance with the procedure described in this Opinion.