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Department of Taxation and Finance

Assessor's Manual, Exemption Administration: RPTL Section 421-d

Exemption Administration Manual - Part 2
Multiple Dwellings

Section 4.07 - RPTL Section 421-d

Multiple dwellings outside NYC financed by NYS Housing Finance Agency

Exemption Code: 4197_         Year originally enacted: 1983

Related statutes: PHFL §42(24)

Summary:

If allowed by local option, new or rehabilitated housing developments outside New York City that contain five or more residential units and are subject to a mortgage financed by the NYS Housing Finance Agency are partially exempt from taxation, but liable for special ad valorem levies and special assessments, provided that (1) the property is used for residential or residential plus auxiliary purposes (see Property Use Requirements below) and (2) the property is not exempt from taxation under any other law.  This exemption is in effect until July 23, 2021.

Eligibility requirements:

Ownership requirements:

Property must be owned by a private individual or organization and must be subject to a mortgage financed by the NYS Housing Finance Agency.

Property location requirements:

Property must be located outside New York City.

Property use requirements:

Project must contain at least five residential units. In addition to residential use, other property uses eligible for exemption are those auxiliary uses determined by the NYS Housing Finance Agency as appropriately related to the residential portion of the project.  These auxiliary uses include commercial, recreational, cultural, communal, dining, medical and nursing treatment, day care or residential child care, and community facilities.

Certification by state or local government:

None required.

Required construction start date or other time requirement: 

None.

Local option

Yes ‑ Each city, town, and village in which the property is located may choose whether or not to allow the exemption.  The option must be exercised through adoption of a local law.

Limitation on exemption

Limitation on exemption by amount, duration, and taxing jurisdiction
Taxing jurisdiction Amount Duration* Special ad valorem levies Special assessments
Taxing jurisdiction: county or county special district**** Percentage

Construction
period** plus
15 years***

Taxable Taxable
Taxing jurisdiction: city**** Percentage Construction
period** plus
15 years***
Taxable Taxable
Taxing jurisdiction: town or town special district**** Percentage Construction
period** plus
15 years***
Taxable Taxable
Taxing jurisdiction: village**** Percentage Construction
period** plus
15 years***
Not applicable Not applicable
Taxing jurisdiction: school district**** Percentage Construction
period** plus
15 years***
Not applicable Not applicable

* After the initial three years of exemption (during construction and rehabilitation), the exemption may not exceed three additional years at 100%, followed by three years at 80%, and thereafter decreasing every three years by 20%.  In addition, the owner is annually liable for the amount of taxes payable in the tax year preceding the start of construction.

**   The duration of exemption during construction or rehabilitation may not exceed three years unless the local law or resolution specifically extends the exemption period.  Total period of exemption may not exceed 18 years.

***  If the term of the mortgage is shorter, the property is exempt only during that term.

 **** If allowed by local option.

Payments in lieu of taxes

None required.

Calculation of exemption

The amount of the exemption is a percentage of the increase in assessed value of the property due to the eligible alterations, installations, or improvements.

The amount of the exemption is calculated by using the following percentages of the increase in assessed value:

Limitation on exemption

General municipal and school district taxes:
Year of exemption Percentage of exemption
During construction (up to 3 years) 100%

After completion of construction or
optional extended construction period:

Years 1-3

100%

After completion of construction or
optional extended construction period:

Years 4-6

80%

After completion of construction or
optional extended construction period:

Years 7-9

60%

After completion of construction or
optional extended construction period:

Years 10-12

40%

After completion of construction or
optional extended construction period:

Years 13-15

20%

Special ad valorem levies and special assessments:

No exemption is allowed.

Filing requirements (owner or occupant of property)

None

Reporting requirements (assessor)

None. 

Please send general questions or comments to Orpts Solutions Center.

Updated: