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Assessor Manuals, Exemption Administration

Exemption Administration Manual—Part 2: Industrial, Commercial, and Public Service

Section 4.06 - RPTL Section 485-n: Residential-commercial properties in certain counties

Exemption code(s):

4449_  

Year originally enacted:

2011 

Related statutes:

None 

Summary

To the extent allowed by local option, properties on which will exist after completion of commercial construction work a building used for commercial purposes, or after completion of residential construction work or a combination of residential construction work and commercial construction work a building used for both residential and commercial purposes, or where dwellings units are created, modernized, rehabilitated, expanded or otherwise improved in the portion of mixed-use property used for residential purposes, and  which are located within benefit areas designated in local law by municipalities in certain counties (see Location Requirements) are partially exempt from city, town, or village taxation purposes, and special ad valorem levies, but liable for special assessments.  The duration of the exemption benefit is 12 years, where the 100 percent of the base amount attributable to the construction work is exempt during the first 8 years of the exemption, 80 percent is exempt in the 9th year, 60 percent is exempt in the 10th year, 40 percent is exempt in the 11th year, and 20 percent is exempt in the 12th year. Upon adoption of a local law by any city, town or village, any of the other municipal corporations in which the designated benefit area is located may likewise offer this exemption by local law.  After adoption by any such city, town or village, the county and any school district(s) in which the designated benefit area is located may also elect to offer this exemption by local law of the county government, or by resolution of the school board(s), respectively.

This exemption may not be granted concurrently with or subsequent to any other property tax exemption granted with respect to the same project, except that a subsequent exemption may be granted where, during the period of such previous exemption, payments in lieu of taxes or other payments were made to a local government in an amount equal to or greater than the amount of taxes that would have been paid on the improvements had the property been granted an exemption pursuant to RPTL §485-n.  In that case, the property may be eligible for a §485-n exemption for a period of 12 years less the number of years such payments were made to the local government. 

Eligibility requirements

Ownership requirements:

Property must be owned by a private individual or corporation. 

Property location requirements:

Property must be located in a city, town or village located in turn in a county having a population of either: a) at least 65,300 but no more than 65,400, as determined in the 2010 federal census, or b) at least 98,900 but no more than 99,000, as determined in the 2010 federal census.  Currently municipalities located exclusively within Livingston County meet the criterion in a), and municipalities located exclusively within Steuben County .  Currently only municipalities within Livingston County meet that criterion in b).

Furthermore, the eligible project must be located within a "benefit area," defined as the area within a city, town or village to which this exemption applies, as designated in local law.

Property use requirements:

Benefits under this exemption are reserved exclusively to property converted, created, modernized, rehabilitated, expanded or otherwise improved for commercial or mixed-use purposes.  The portion devoted to residential construction work may not include dwelling units in a hotel.  The cost of construction must exceed $10,000 or a greater amount as may be specified in local law (see Local Option).  Such construction costs may not include ordinary maintenance and repairs.

Certification by state or local government:

Completion of project must be demonstrated by a certificate of occupancy.

Required construction start date or other time requirement:

Construction on the project must commence subsequent to the date on which the municipality's local law allowing this exemption has taken effect.

Local option

Yes. Each eligible city, town or village may choose whether or not to allow the exemption, and also for the appointment of a commercial/mixed use incentive board responsible for designating the benefit areas to which the exemption applies. The option to exempt must be exercised through adoption of a local law (after a public hearing).  Upon adoption of such a local law, the other municipalities in which the designated benefit area is located may pass a local law allowing the exemption from each such municipality's taxation (or may pass a local resolution in the case of the school districts located in such area(s)).

Note: In instances where an eligible city, town or village has previously designated a business district encompassing a defined area which was subject to public input and was approved by and received funding for economic development purposes from a state agency, the municipality may utilize the defined boundaries of such previously defined area, or a combination of such boundaries subject to review by the commercial/mixed-use incentive board.  

Upon adoption of a local law allowing the exemption, each taxing jurisdiction may also require that the eligible cost of conversion exceed $10,000 in its local law (after a public hearing).  Likewise, any school district that comprises at least some part of a designated benefit area may pass a resolution with similar requirements.

Limitation on exemption

Limitation on exemption by amount, duration, and taxing jurisdiction
General municipal taxes School district taxes Special ad valorem levies Special assessments
1. Amount Yes* Yes* Yes No exemption allowed
2. Duration 12 years* 12 years* 12 years* No exemption allowed
3. Taxing jurisdiction
a. County or county special districts Ex** NA Ex** Tax
b. City Ex** NA NA 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 the "base amount," or a proportion thereof (see Calculation of Exemption below).

**If allowed by local option (municipal and school district option conditioned on initial adoption by city, town, or village)

Note: This exemption expires after September 23, 2024.

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

Percentages of the base amount as shown.  The base amount is the increase in assessed value attributable to eligible conversion, creation, modernization, rehabilitation, expansion or other 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 and percentage of exemption
Year of exemption Exemption percentage
1–8 100
9 80
10 60
11 40
12 20

Special ad valorem levies and special assessments:

Special ad valorem levies:

See General municipal and school district taxes above.

Special assessments:

Coding of exemption on assessment roll

Coding of exemption on assessment roll
Code Description of alternative codes possible
4449_

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.

Filing requirements (owner or occupant of property)

Form RP-485-n, Application for Real Property Tax Exemption for Residential-Commercial Properties in Certain Counties.

Application required in first year only

Reporting requirements (assessor)

None.

Similar exemptions

Similar exemptions
Subject Statute
Business investment property outside New York City RPTL §485-b
Mixed-use properties in certain municipalities RPTL §485-a


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