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Department of Taxation and Finance

Assessor's Manual, Volume 4, Exemption Administration

Exemption Administration Manual - Part 2
Industrial, Commercial, and Public Service

Section 4.06 - RPTL Section 1138

Withdrawal of Parcels from Foreclosure

Exemption Code(s): 2970_ Year Originally Enacted: 1994

Related Statutes: RPTL Article 11, Title 3

Summary: If the governing body of a tax district cancels a tax lien on a parcel withdrawn from foreclosure, and determines that there is no practical method to enforce the collection of future taxes, the parcel becomes eligible for exemption from taxation, ad valorem levies, and special assessments. When copies of a Certificate of Prospective Cancellation of the tax lien issued by the enforcement officer are delivered to the assessor and to the County Director of Real Property Tax Services, the parcel will receive this exemption. The parcel remains exempt unless the tax district legislative body determines that the parcel should be restored to the tax rolls, and directs the enforcing officer to issue a Certificate of Restoration of the tax lien.

  1. Eligibility requirements:
    1. Ownership Requirements: None.
    2. Property Location Requirements: None.
    3. Property Use Requirements: None.
    4. Certification by State or Local Government: A copy of the resolution directing the cancellation of the tax lien on the eligible property must be filed by the legislative tax body with the enforcing officer. The enforcing officer must then issue a Certificate of Prospective Cancellation on the affected parcel(s), and file copies of such certificate with both the assessor and the county director of real property tax services. The parcel will then become wholly exempt from taxation notwithstanding any other provisions of the law.
    5. Required Construction Start Date or Other Time Requirement: None.
  2. Local option: Yes. The governing body of the tax district has various alternatives to canceling the delinquent tax lien on a parcel withdrawn from foreclosure, and, if it does cancel the lien, may restore the property to the taxable portion of the roll thereafter.
  3. Limitation on exemption:
    Limitation on exemption
    Ad Valorem
    1. Amount No
    2. Duration Yes* Yes* Yes* Yes*
    3. Taxing Jurisdiction a. County or County
    Special Districts
    Ex NA Ex Ex
    b. City Ex NA NA Ex
    c. Town or Town
    Special District
    Ex NA Ex Ex
    d. Village Ex NA Ex Ex
    e. School District NA Ex NA NA
      Ex-Exempt Tax-Taxable NA-Not Applicable

    * Parcels exempt under this section remain exempt unless the tax district's legislative body determines that the parcel should be restored to the taxable portion of the assessment roll and the enforcing officer files a certificate of restoration with the assessor and the County Director of Real Property Tax Services.

  4. Payments in lieu of taxes: None required.
  5. Calculation of exemption:
    1. General Municipal and School District Taxes: 100% of assessed value.
    2. Special Ad Valorem Levies and Special Assessments: 100% of assessed value or other basis of assessment.
  6. Coding of exemption on assessment roll:
     Coding of exemption on assessment roll
    Code Description of Alternative Codes Possible

    Assessment Roll Section(s): Exempt (RPS Section 8).

  7. Filing requirements (Owner or Occupant of Property): None.
  8. Reporting requirements (Assessor): None.
  9. Similar exemptions: None.

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