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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Multiple Dwellings

Section 4.07 - RPTL Section 420-c

Low-Income Housing in New York City RPTL Section 420-c

Exemption Code(s): 25800 Year Originally Enacted: 1993

Related Statutes: PHFL Articles 1 ( §2), 11 SUMMARY:     Real property that is located in New York City, is owned by certain corporations, partnerships, limited liability companies, or charitable organizations (see Ownership Requirements below), and is used for housing for persons or families of low income is wholly exempt from general municipal and school district taxes. Such property is, however, liable for special assessments. This exemption expires upon the expiration or termination of the required regulatory agreement. The property receiving this exemption may not be simultaneously receiving any other property tax exemption or abatement.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements:

      Ownership requirements vary according to the type of owner eligible for receiving this exemption and the date the application for exemption is accepted:

      1. Exemption application approved before September 28, 2004: Property must be owned by a corporation, partnership, or limited liability company formed for the purpose of providing housing accommodations for persons and families of low income. The owner must be (a) either a nonprofit housing development fund company organized under PHFL Article 11 or a nonprofit housing corporation, as defined in PHFL Article 11, that is not a housing development fund company, (b) a wholly owned subsidiary of a nonprofit housing development fund company, or (c) a partnership or limited liability company, the controlling interest of which is held by a nonprofit housing development fund company or a nonprofit housing corporation, by a wholly owned subsidiary of a nonprofit housing development company, or by corporation sponsored or formed by a nonprofit housing development fund company or a nonprofit housing corporation.

        In addition, the owner (a) must have received a loan from the city, the state, or the Housing Trust Fund Corporation established pursuant to PHFL §45-a or any successor corporation, (b) must enter into a regulatory agreement with the municipality, the state, or the Housing Trust Fund Corporation or any successor corporation guaranteeing the provision of housing for persons and families of low income, and (c) must be a participant in the federal low-income housing tax credit program established under §42 of the Internal Revenue Code of 1986.

      2. Exemption application approved on or after September 28, 2004:

        Property must either be owned by one or more corporations, partnerships or limited liability companies, at least 50 percent of the controlling interest of which is held by a charitable organization. For purposes of this exemption, a charitable organization is defined as (1) an entity formed for purposes that include providing housing accommodations for persons and families of low income (as defined in PHFL Section 2), that has received written recognition of exemption under §501(c)(3) or §501(c)(4) of the Internal Revenue Code of 1986 as amended or any successor statute, or (2) a corporation, partnership or limited liability company wholly owned and wholly controlled by an entity formed for purposes that include providing housing accommodations for persons and families of low income that has received written recognition of this exemption under IRS Code §501(c)(3) or §501(c)(4).

        An eligible property owner must be one or more entities that holds (1) legal and beneficial title to a qualified real property, or (2) a legal and beneficial leasehold interest with a term of not less than 30 years in that property.

        In addition, the regulatory agreement approved by New York City for the property must require (a) that the property constitutes housing accommodations for persons and families of low income (b) that the housing units are currently or were formerly assisted by the federal low-income housing tax credit program and are rented in accordance with the income requirements of the tax credit program, (c) the regulatory agreement is recorded against the eligible real property, and (d) the regulatory agreement binds all parties in interest to the eligible real property and their respective successors and assigns.

        A regulatory amendment may include such other terms and conditions as the city may determine, including, but not limited to, requiring payments in lieu of taxes.

        Regardless of when the application for this exemption has been approved, any exemption granted under RPTL §420-c expires upon the expiration or termination of the regulatory agreement specified above.

      NOTE: An owner meeting the requirements as stated in (A) may amend his or her property's regulatory agreement, or enter into a new regulatory agreement on or after September 28, 2004. However, in making these changes the owner must terminate the current exemption and re-apply for this exemption under the ownership requirements as stated in (B) to remain eligible for this exemption.

    2. Property Location Requirements: Property must be located in New York City.
    3. Property Use Requirements: Property must be used for housing accommodations for low-income tenants. For a definition of low-income persons and families, see Chart IE, PHFL Article 1, §2.
    4. Certification by State or Local Government: Owner must enter into a regulatory agreement with the city guaranteeing the provision of low-income housing. In addition, the owner must obtain a certificate of eligibility for exemption from the NYC Department of Housing Preservation and Development.
    5. Required Construction Start Date or Other Time Requirement None.
  2. LOCAL OPTION: No
  3. LIMITATION ON EXEMPTION:
    General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Tax
    Special
    Assessments
    1. Amount No
    limit
    No
    limit
    NA No
    exemption
    allowed
    2. Duration No
    limit
    No
    limit
    NA No
    exemption
    allowed
    3. Taxing Jurisdiction
    a. City
    Ex Ex NA Tax
    b. School District
    Ex NA NA Tax
    Ex-Exempt      Tax-Taxable      NA-Not Applicable
  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: No exemption allowed.
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    25800

    Assessment Roll Section(s): Exempt.

    NOTE: This code should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below.

  7. FILING REQUIREMENTS (Owner or Occupant of Property): None.
  8. REPORTING REQUIREMENTS (Assessor): None.
  9. SIMILAR EXEMPTIONS: See Chart IA and Chart IB.

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