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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-l

Capital 
Improvements to Residential Buildings in Certain Towns

Exemption Code(s):     4425_

Year Originally Enacted:     2012

Related Statutes:     None

SUMMARY: To the degree allowed by local option, one-, two-, and three-family dwellings that have undergone reconstruction, alteration or improvement and which are located in certain towns are partially exempt from town taxes and town special ad valorem levies, but liable for special assessments. The duration of the exemption benefit is five years, where 50 percent of the base amount attributable to the reconstruction, alteration or improvement is exempt in the first year of exemption, declining by ten percentage points in each of the remaining four years of the exemption term. After adoption of a local town law, the county in which such town is located, any village located in such town and any school district wholly or partially located in such town may likewise offer this exemption from taxation and special ad valorem levies by local law (or in the case of a school district, by local resolution). 

  1. ELIGIBILITY REQUIREMENTS:

    1. Ownership Requirements: Property must be owned by a private individual or individuals, or by an organization. The owner of the property who applies for this exemption must have satisfied all outstanding town, county, village and school tax obligations. Furthermore, this exemption may not be transferred to another owner if the property is sold or transferred during the exemption period.
       
    2. Property Location Requirements: Property must be located in a town having a population of not less than 16,350 and not more than 16,360, and in turn located in a county having a population of not less than 919,000 and not more than 919,100, as measured in the 2010 federal census. Only the Town of Evans (Erie County) meets these population criteria. 
       
    3. Property Use Requirements: Property must be used exclusively as a one-, two- or three-family residential building, and which has been reconstructed, altered or improved subsequent to the effective date of the local law.  The improvement project may not be one of ordinary maintenance and repairs. If the property receiving this exemption ceases to be used primarily for residential purposes as stated above, the exemption will cease. 
       
    4. Certification by State or Local Government: Such project must be documented by a building permit, if necessary, or other appropriate documentation as required by the assessor and/or code enforcement officer. 
       
    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 (see F. Filing Requirements).
       
  2. LOCAL OPTION: Yes, the eligible towns are allowed the following choices:

    1. Exemption --To allow the exemption, a town or other eligible taxing jurisdiction as set forth below, through its governing board must enact a local law (or in case of a school district, by resolution).  The eligible taxing jurisdiction must first hold a public hearing before adopting a local law or resolution.
       
    2. Percentage of Exemption -- The taxing jurisdiction allowing the exemption may also reduce the percentage of exemption allowed in each year by state law  (see Calculation of Exemption below).  
    3. Minimum Assessed Value --  The taxing jurisdiction allowing the exemption may also raise the required minimum increase in assessed value attributable to the eligible reconstruction, alteration or improvement as established by state law (see Property Use Requirements above).

Once the town has adopted a local law to allow the exemption, the county in which the town is located may enact a local law allowing the exemption, and may also enact local laws to reduce the percentage of exemption otherwise allowed, increase the required minimum assessed values attributable to the reconstruction, alteration or improvement, or both. Likewise, any school district located wholly or partially within the town may pass similar resolutions authorizing and limiting this exemption.  
 

C.  LIMITATION ON EXEMPTION:

  General
Municipal
Taxes
School
District
Taxes
Special
Ad Valorem
Levies

Special
Assessments
1. Amount Yes* Yes* Yes* No
exemption
allowed
2. Duration
5 years*

5 years*

5 years*
No
exemption
allowed
3. Taxing Jurisdiction a. County or County
Special Districts
Ex** NA Ex** Tax
b. City Ex** NA Ex** Tax
c. Town or Town
Special District
Ex** NA Ex** Tax
d. Village Ex** NA NA Tax
e. School District NA Ex** NA NA
Ex - Exempt          Tax - Taxable          NA - Not Applicable

* Amount limited to a proportion of the "base amount (see E. Calculation of Exemption below).
** If allowed by local option (county, village and school district option conditional on initial adoption by town government).
 

D.  PAYMENTS IN LIEU OF TAXES:     None required.
 

E.  CALCULATION OF EXEMPTION:

  1. General Municipal and School District Taxes: Percentages of the "base amount," as shown. The base amount is the increase in assessed value attributable to the eligible reconstruction, alteration or improvement as determined in the initial year of exemption. The base amount remains constant throughout the term of the exemption schedule below. 
     
    The percentage of the base amount that is exempt varies as follows:

    Year of Exemption Percentage of
    Exemption Base
    1 50
    2 40
    3 30
    4 20
    5 10

     
  2. Special Ad Valorem Levies and Special Assessments:

Special Ad Valorem Levies: See General Municipal and School District Taxes above.

Special Assessments:  No exemption allowed.

NOTE: If the taxing jurisdiction elects to: a)reduce the percentage of exemption allowed in each year by state law, b) raise the required minimum increase in assessed value attributable to the eligible project by state law or c) both, a project in the course of reconstruction, alteration or improvement may not be subject to such amendments.  

F. CODING OF EXEMPTION ON ASSESSMENT ROLL:

Code

4425_

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

NOTE: This code should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute that applies.
 

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

Form RP-421-l  -- Application for Real Property tax Exemption for Improvements to Residential Buildings in Certain Towns

Application form and instructions are available at the property tax forms website.

H. REPORTING REQUIREMENTS (Assessor): None.
 

I. SIMILAR EXEMPTIONS:

Subject Statute
Home improvements RPTL §421-f
New residential property in certain cities RPTL §485-m
Residential capital improvements in certain cities RPTL §421-ff
Residential investment in certain municipalities RPTL §§485-h, 485-i,
485-j, 485-k, 485-l,
485-m
Residential property improvements in certain cities RPTL §485-j
Residential property improvement in certain towns RPTL §485-l

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