Exemption Administration Manual, Part 1: Municipal Governments—Section 4.03 - RPTL Section 406(1) Municipal Corporations (Property within corporate limits held for public use)
Section 4.03 - RPTL Section 406(1) Municipal Corporations (Property within corporate limits held for public use)
Year originally enacted:
Real property that (1) is owned by a county, city, town, or village, (2) is located within the boundaries of the owning municipal corporation, and (3) is held for public use is wholly exempt from taxation and is exempt, for certain purposes, from special ad valorem levies and special assessments.*
Property must be owned by a county, city, town, or village.
Property location requirements:
Property must be located inside the boundaries of the owning county, city, town, or village.
Property use requirements:
Property must be held for a public use," which means a use that is of benefit to the community at large (see definition in note below). This requirement is satisfied if the property is devoted to use by the general public or public agencies. Land or improvements, as well as portions thereof, which are leased to a private individual or organization are exempt so long as they are held for a public purpose. Conversely, if land or improvements, or portions thereof, are leased to a private individual or concern and used for nonpublic purposes they are subject to taxation for all purposes.
Certification by state or local government:
Required construction start date or other time requirement:
Limitation on exemption
|General municipal taxes||School district taxes||Special ad valorem tax||Special assessments|
|1. Amount||No limit||No limit||No limit||No limit|
|2. Duration||No limit||No limit||No limit||No limit|
|3. Taxing jurisdiction||a. County or County Special Districts||Ex||NA||L||L|
|c. Town or Town Special District||Ex||NA||L||L|
|e. School District||NA||Ex||NA||NA|
|Ex-Exempt Tax-Taxable NA-Not Applicable|
|L - Liable only for (1) county and town charges for capital costs of sewer systems, water supply systems, waterways and drainage improvements, and streets and highways, plus (2) special assessments for indebtedness contracted before 7/1/53.|
Payments in lieu of taxes
Calculation of exemption
General municipal and school district taxes:
100% of assessed value of portion(s) of property held for property use.
Special ad valorem levies and special assessments:
See General Municipal Taxes above.
The exemption applies to all levies and assessments imposed by counties, county special districts, towns, and town special districts except (1) charges levied to pay for the capital costs of sewer systems, water supply systems, waterways and drainage improvements, and streets and highways, and (2) special assessments for indebtedness contracted before 7/1/53. The exemption does not apply to special assessments imposed by cities or villages.
Coding of exemption on assessment roll
|Code||Description of alternative codes possible|
Assessment roll section(s):
Exempt (ARLM § 8).
Note: These codes should not be used to identify (1) property acquired through tax sale and exempt under RPTL §406(5), (2) reforested lands owned by counties (RPTL §406(6)), (3) property owned by a school district or Board of Cooperative Educational Services (RPTL §408), (4) property owned by a special district (RPTL §410 or §410-a), (5) cemetery property exempt under RPTL §446, or (6) 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.
Filing requirements (owner or occupant of property)
Reporting requirements (assessor)
|Cemeteries, public or private||RPTL §446|
|City University Construction Fund (NYC)||Ed L §6282|
|Cultural Resources Trust, NYC||Art-Cult L §21|
|Educational Construction Fund, NYC||Ed L §468|
|Educational Construction Fund, Yonkers||Ed L §492|
|Health & Hospital Corporation, NYC||McK U Con L §7400|
|Multiple dwellings owned by municipality||PHFL § §36-a(2), 36-a(4)|
|Municipal corporations, revenue-producing undertakings not exempt under RPTL §406(1)||Gen Muny L §411|
|Municipal industrial development agencies||RPTL §412-a & Gen Muny L §874|
|Public authorities||RPTL §412 & Pub Auth L|
|Railroads and related property (NYC)||Rap Tran L §103|
|Urban renewal property owned by municipality||Gen Muny L § §506, 555, 560|
|Utica Transit Authority||Trans L §64|
* The New York State Court of Appeals has stated that held for public use" means that the property should be occupied, employed, or availed of, by and for the benefit of the community at large, and implies a possession, occupation and enjoyment of the public, or by public agencies" (Town of Harrison v. Westchester County, 1963).
Please send general questions or comments to ORPTS.