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Assessor's Manual, Volume 4, Exemption Administration

Exemption Administration Manual - Part 1
Residential - Other Than Multiple Dwellings

Section 4.01 - RPTL Section 421-ff

Residential Capital Improvements in Certain Cities

Exemption Code(s): Vacant Residential 41993
        Residential LEED - Certified/Silver 42003
        Residential LEED - Gold 42013
        Residential LEED - Platinum 42023

Year Originally Enacted:     2012

Related Statutes:     None.

SUMMARY: If allowed by local option, residential property which is reconstructed, altered or improved under certain conditions and located in certain cities are partially exempt from city taxes, but liable for county and school taxes, county special ad valorem levies and special assessments.  Such partial exemption of the residential property is measured as the value added to the property by reconstruction, alteration or improvement, and declines according to schedules that vary according to the level of standards that are met. 

A. ELIGIBILITY REQUIREMENTS:

1. Ownership Requirements: Property must be owned by an individual or individuals, or by a private organization.
 

2. Property Location Requirements: Property must be located in cities having a population of not less than 27,500, and not more than 28,000, as measured in the 2010 federal census. Only Auburn (Cayuga County) satisfies this criterion.
 

3. Property Use Requirements: To receive the basic level of exemption, the property must be a residential building that has been reconstructed, altered or improved.  Alternatively, such residential projects are eligible for enhanced exemption benefits if such project meets a city-approved standard equivalent to certified/silver, gold or platinum standards for Leadership in Energy Environmental Design (LEED), published by the U. S. Green Building Council. 

The value of the residential, reconstruction, alteration or improvement project must be greater than $7,500, and may not be one of ordinary   maintenance and repairs. The exemption granted on a reconstructed, altered or improved residential building ceases if such a building is no longer used primarily for residential purposes.  

4. Certification by State or Local Government: Applications for enhanced exemption benefits at one of three levels equivalent to LEED certification (certified/silver, gold or platinum) must include a copy of such certification for the categories of certified/silver, gold or platinum (The assessor must then determine whether the application meets all of the requirements to be eligible for the exemption).  The reconstruction, alteration or improvement project must be documented by a building permit, if required, or by other appropriate documentation as required by the assessor.   

          5. Required Construction Start Date or Other Time Requirement:  The reconstruction, alteration or improvement project may not commence prior to     the effective date of the local law. Application for this exemption must be filed within one year of completion of such project.

B.  LOCAL OPTION: Yes -- the governing body of a city must pass a local law to adopt the exemption after a public hearing. Such a local law may provide that the exemption applies to reconstruction, alteration or improvement projects that commence on or after a date of the local law of the city adopting this exemption.  but not earlier than the effective date of such local law. A copy of the local law must be filed with the Commissioner and the assessor. 
 

C. LIMITATION ON EXEMPTION: 

    General
Municipal
Taxes
School
District
Taxes
Special
Ad Valorem
Levies
Special
Assessments
1. Amount Yes* No
exemption
allowed
No
exemption
allowed
No
exemption
allowed
2. Duration Yes* No
exemption
allowed
No
exemption
allowed
No
exemption
allowed
3. Taxing Jurisdiction a. County or
County
Special Districts
Tax NA Tax Tax
b. City Ex** NA NA Tax
c. Town or Town
Special District
NA NA NA NA
d. Village NA NA NA NA
e. School District NA Ex** NA NA
Ex - Exempt          Tax - Taxable          NA - Not Applicable

* See Calculation of Exemption below.
** If allowed by local option.

D. PAYMENTS IN LIEU OF TAXES:     None required. 

E. CALCULATION OF EXEMPTION:

  1. General Municipal and School District Taxes: The schedule to be followed in calculating the exemption depends on which exemption applies: a reconstructed, altered or improved residential building, or such a building that meets energy efficiency and environmental standards in one of three categories specified in the LEED program  (certified/silver; gold; or platinum--these standards can be found at www.usgbc.org). For all of the exemption schedules listed below, the extent of the exemption is determined by the "exemption base" and the percentage of that base which is taxable during each year the exemption is in effect.  (The exemption base is defined as the increase in the assessed value attributable to reconstruction, alteration or improvement in the initial year of the exemption).  The exemption applies only to city taxes.

    1. Reconstructed, altered or improved residential buildings that do not meet city-approved standards equivalent to LEED: The following percentages of the increase in assessed value resulting from the reconstruction, alteration or improvements should be applied: 
Year of Exemption Percentage of
Exemption
1 100
2 100
3  80
4  60
5  40
6 20

 
b.    Newly Constructed Residential Structures Qualifying for LEED Certification (by designated category): The following percentages of    the   increase in assessed value resulting from the reconstruction, alteration or improvements should be applied:

Percentage of Exemption
Year of Exemption (1) Certified/Silver (2) Gold (3) Platinum
1 100 100 100
2 100 100 100
3 100 100 100
4  80 100 100
5  60  80 100
6  40  60 100
7  20  40  80
8  0  20  60
9  0  0  40
10  0  0  20

 2. Special Ad Valorem Levies and Special Assessments: Cities do not impose special ad valorem levies. No exemption is allowed for special assessments. 

 F. CODING OF EXEMPTION ON ASSESSMENT ROLL:

Code Description of Alternative Codes Possible
41993 Residential capital improvement
42003 Residential LEED -- Certified/Silver
42013 Residential LEED -- Gold
42023 Residential LEED --Platinum

 Assessment Roll Section(s): Taxable (RPS Section 1).

NOTE: These codes should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below. For coding of such properties, see the Exemption Profile for the statutes that apply.

G. FILING REQUIREMENTS (Owner or Occupant of Property):

Form RP-421-ff -- Application for Tax Exemption of Residential Capital Improvements in Certain Cities

Application required in first year only.  Application must be filed within one year of the date of completion of the reconstruction, alteration or improvement project.

H. REPORTING REQUIREMENTS (Assessor): None.

I.  SIMILAR EXEMPTIONS:

 

Subject Statute
New residential properties in certain cities RPTL §485-m
Residential buildings in certain towns RPTL §421-l
Residential investment in certain municipalities RPTL § §485-h, 485-i, 485-j, 485-k, 485-l, 485-m
Residential investment in certain cities RPTL §485-j
Residential investment in certain towns RPTL §485-l

Exemption Application Form:   Form and instruction are available on the ORPTS forms website

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