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Volume 9 - Opinions of Counsel SBEA No. 20

Opinions of Counsel index

Veterans exemption (transfer of exemption) - Real Property Tax Law, § 458:

A veteran receiving a veterans exemption on or after August 30, 1984 may transfer that exemption by selling his exempt property, recovering his eligible funds in the proceeds of sale, and then purchasing replacement property. A veteran who had eligible funds but did not apply for an exemption by March 1, 1986 may not receive a veterans exemption in a municipality granting the alternative veterans exemption.

In 1974, a veteran sold property receiving an “eligible funds” veterans exemption (RPTL, §458(1)). In 1976, the veteran used the proceeds of sale to purchase replacement property. The veteran, however, did not file an application for a veterans exemption on the replacement property until 1987. The town in which the replacement property is located grants the alternative veterans exemption (RPTL, §458-a). Our opinion has been requested as to whether the veteran may now receive the veterans exemption.

Subdivision (6)(a)(i) of section 458 of the RPTL provides that, unless a municipality has opted not to grant the alternative veterans exemption, no new eligible funds (§458(1)) or pro rata (§458(5)) exemptions may be granted on an assessment roll based upon a taxable status date occurring on or after March 2, 1986. That same clause, however, also provides that the owner of real property receiving an exemption pursuant to section 458(1) or (5) prior to March 2, 1986, may continue to receive that exemption notwithstanding the decision of his municipal corporation to grant the alternative veterans exemption. Moreover, clause (iii) of that paragraph provides that, in general, “where such property is sold and moneys equalling or exceeding the amount of eligible funds used in the purchase of the parcel are received upon such sale, if such moneys are thereafter used to purchase another parcel, an exemption may be granted as provided in subdivision one of this section provided the parcel is otherwise eligible for such exemption.”

In our opinion, these clauses of subdivision 6(a), commonly referred to as “grandfather” provisions, were designed to permit a veteran receiving an eligible funds (or pro rata) veterans exemption on or after August 30, 1984, the effective date of section 458(6), to continue to receive that exemption notwithstanding the decision of his or her municipality to grant the alternative exemption. The purpose of clause (iii), in our opinion, was to allow a veteran who so chose to retain the eligible funds exemption to thereafter transfer that exemption by selling his or her original exempt property, recovering his or her eligible funds in the proceeds of sale, and then purchasing replacement property.

In the instant case, although the veteran recovered his eligible funds by selling his original exempt property, he was not receiving a veterans exemption on property as of the effective date of section 458(6) (i.e., August 30, 1984). As such, the veteran cannot take advantage of the grandfather provisions discussed above. The delay in filing for a veterans exemption on the replacement property purchased in 1976 places him in the same position as a veteran who had eligible funds but never purchased property. That is, since taxable status date in the town is March 1, he had until March 1,1986 to still apply for and receive a “new” veterans exemption. Accordingly, in our opinion, the veteran may not now receive an eligible funds veterans exemption. He may, however, receive the alternative veterans exemption provided he satisfies all the statutory requirements for such exemption.

September 1, 1987

NOTE:  Superseded in part by L.2000, c.334.

Updated: