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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Multiple Dwellings

Section 4.07 - RPTL Section 421-g

Multiple Dwellings in New York City
Converted from Other Uses
RPTL Section 421-g

Exemption Code(s): 48820 Year Originally Enacted: 1995

Related Statutes: RPTL §§489-bbbbb; 499-b; 499-bb

SUMMARY:     Class A multiple dwellings which are converted from non-residential use and which (1) are located in designated areas of lower Manhattan; (2) are certified by the New York City Department of Housing and Preservation Development; and (3) meet the minimum spatial requirements for conversion are partially exempt from taxation, but liable for special assessments. Such eligible projects also receive tax abatement benefits on the tax lots containing the eligible multiple dwelling (equal to a percentage of the tax that would have been due in the first year of the benefit period except for the abatement). Owners of multiple dwellings whose conversions meet reduced minimum spatial requirements for conversion may apply for partial exemption and abatement benefits. Extended exemption and abatement benefits are available for those buildings which were designated as historical landmarks before issuance of a permanent or temporary certificate of occupancy for the portion of the building converted to an eligible multiple dwelling. Dwelling units in the buildings receiving benefits under this program are subject to rent stabilization during the benefit period. Structures or portions of structures having a certificate of occupancy for commercial, manufacturing or other non-residential use to be converted to a Class A multiple dwelling and which (1) are located in designated areas of lower Manhattan and (2) meet minimum spatial requirements for conversion are partially exempt from taxation for one year, but liable for special assessments. (No abatement accompanies this exemption). In order to qualify for exemption and abatement benefits, buildings permits for such conversion work on eligible multiple dwellings must be issued on or after July 1, 1995 and no later than June 30, 2006. Benefits under this program may not be combined with benefits received under other related statutes, as listed above, for the same tax lot.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Property must be owned by a private or public individual or organization.
    2. Property Location Requirements: For all exemptions and abatement under this section, the property must be located in New York City, within a district of lower Manhattan, as described in RPTL §421-g (1)(g). If the eligible multiple dwelling is located on a parcel which is partly located within the defined district, it is considered to be located entirely within the eligible area for exemption and abatement purposes.
    3. Property Use Requirements: The following requirements apply to all types of exemptions and abatements:
      1. The property must not be used as a hotel.
      2. The property must be a Class A multiple dwelling created from conversion of a non-residential building within the stated eligible area. Furthermore the aggregate floor area (the sum of the gross areas of the floors of the building) of commercial, community facility, and accessory use space within the multiple dwelling does not exceed 25% of the total aggregate floor area of the multiple dwelling.
      3. The non-residential building, or portion of, which is being converted to a multiple dwelling must have a certificate of occupancy for commercial, manufacturing or other non-residential use for not less than 90% of the aggregate floor area of such building, or the portion of, which is being converted to a multiple dwelling.
      4. If a local law exists providing for the stabilization of rents in multiple dwellings, the rents of the dwelling exempt under this program are subject to control under that local law for the entire period during which the eligible multiple dwelling receives benefits under this program, unless they are exempt from such control by reason of cooperative or condominium status. This period may be extended if rent-control provisions other than those contained in this program become applicable.
    4. Certification by State or Local Government: Project must be certified for eligibility by the New York City Department of Housing and Preservation Development.
    5. Required Construction Start Date or Other Time Requirement

      For non-residential buildings eligible for the one-year exemption: The amount assessed value exempt applies for the tax year immediately following the first taxable status date, provided (1) such taxable status date occurs after commencement of conversion to a Class A multiple dwelling and (2) such taxable status date is the first taxable status date on which an increase in assessed value attributable to such physical improvement has been assessed. In any case, no such exemption may be granted if completion of conversion occurs before the 15th day of April following such taxable status date. This exemption must be revoked if such non-residential building is not converted into an eligible multiple dwelling.

      For non-residential buildings of less than 100,000 square feet of aggregate floor area: a certificate of occupancy for multiple dwelling use for at least 75% of the aggregate floor area must be issued within 3 years of issuance of a building permit for such use. If such a non-residential building contains a separately assessed non-residential parcel, the aggregate floor area of such separately assessed non-residential parcel should not be considered in determining whether 75% of the aggregate floor area has been converted to multiple dwelling use.

      For non-residential buildings of 100,000 square feet or more of aggregate floor area: a certificate of occupancy for multiple dwelling use for at least 75% of the aggregate floor area must be issued within 5 years of issuance of a building permit for such use.

      Furthermore, a certificate of occupancy for at least 50% of the aggregate floor space must be issued within 3 years of issuance of a building permit for such a use, and lastly the owner must submit proof of completion of partial conversion within 3 years with an application for a certificate of eligibility for full exemption and abatement benefits under this program. Owners who apply for partial exemption and abatement benefits must submit proof of issuance of a certificate of occupancy for at least 50% of aggregate floor space for residential use within 3 years of issuance of a building permit. If such a non-residential building undergoing conversion to an eligible multiple dwelling contains a separately assessed non-residential parcel, the aggregate floor area of such separately assessed non-residential parcel should not be considered in determining whether 75% (or, in the case where partial exemption and partial abatement are being sought, 50%) of the aggregate floor area has been converted to an eligible multiple dwelling. Owners of such buildings who hold certificates of eligibility for partial exemption and abatement must obtain a certificate of occupancy for multiple dwelling use of at least 50% of the aggregate floor space of such a building within 3 years of issuance of a building permit in order to receive benefits.

  2. LOCAL OPTION: No.
  3. LIMITATION ON EXEMPTION:
    General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Tax
    Special
    Assessments
    1. Amount Yes Yes NA No
    exemption
    allowed
    2. Duration Yes* Yes* NA No
    exemption
    allowed
    3. Taxing Jurisdiction
    a. City
    Ex NA NA Tax
    b. School District
    NA Ex NA Tax
    Ex-Exempt      Tax-Taxable      NA-Not Applicable

    * Limitations on amount and duration vary by type of project -- see Calculation of Exemption below.

  4. PAYMENTS IN LIEU OF TAXES: None required.
  5. CALCULATION OF EXEMPTION:
    1. General Municipal and School District Taxes:
      1. Exemption for eligible multiple dwellings (except designated landmarks). The following percentages of assessed value attributable exclusively to the physical improvement are eligible for exemption:
        Tax Year Following
        Date of Issuance of
        Certificate of Eligibility
        Percentage of
        Applicable Exemption
        1 - 8
        9
        10
        11
        12
        100
        80
        60
        40
        20
      2. Exemption for eligible multiple dwellings (designated as landmarks). The following percentages of assessed value attributable exclusively to the physical improvements performed on a structure designated as a landmark before issuance of a certificate of occupancy for multiple dwelling use are eligible for exemption:
        Tax Year Following
        Date of Issuance of
        Certificate of Eligibility
        Percentage of
        Applicable Exemption
        1 - 9
        10
        11
        12
        13
        100
        80
        60
        40
        20
      3. One-year exemption for non-residential buildings. Exemption is limited to the assessed value attributable exclusively to the physical improvement for the tax year immediately following the first taxable status date (subject to conditions stated in Required Construction Start Date or Other Time Requirement). Note: Abatement does not accompany this exemption.
      4. Abatement for eligible multiple dwellings (except designated landmarks). The following percentages of abatement of real property taxes, equal to the amount which would be due in the first year of the benefit period except for such abatement, are eligible for abatement:
        Tax Year Following
        Date of Issuance of
        Certificate of Eligibility
        Percentage of
        Applicable Exemption
        1 - 10
        11
        12
        13
        14
        100
        80
        60
        40
        20
      5. Abatement for eligible multiple dwellings (designated as landmarks). The following percentages of abatement of real property taxes, equal to the amount which would be due in the first year of the benefit period but for such abatement, are eligible for abatement:
        Tax Year Following
        Date of Issuance of
        Certificate of Eligibility
        Percentage of
        Applicable Exemption
        1 - 11
        12
        13
        14
        15
        100
        80
        60
        40
        20

        In the case of all exemptions and both abatements, the following conditions apply.

        For all non-residential buildings, if the commercial, community facility and accessory use exceeds 12% of the aggregate floor area of a building granted exemption or abatement, the exempt value must be reduced by an amount equal to the percentage of the aggregate floor area by which the aggregate floor area of the commercial, community facility and accessory use exceeds 12% of the aggregate floor area of the building. No benefits are available if such space exceeds 25% of the aggregate floor area. (For purposes of the one-year exemption on non-residential buildings, aggregate floor area is defined as the intended aggregate floor area after completion of conversion. If, after completion of conversion, the aggregate floor area of commercial, community facility and accessory use space is greater than the intended aggregate floor area of such space and the actual aggregate floor area of such space exceeds 12% of the actual aggregate floor area, then this exemption must be revoked or partially revoked, as required, to reflect the actual aggregate floor area of such space). If the building contains a separately assessed non-residential parcel, the aggregate floor area of such parcel should not be considered in calculating the aggregate floor area of commercial, community facility and accessory use space in determining eligibility for benefits under this program. Accessory use may not include home occupation space or accessory parking space located more than twenty-three feet above the curb level.

        For non-residential buildings of less than 100,000 square feet of aggregate floor area, only the aggregate floor area for which a certificate of occupancy for multiple dwelling use is issued within 3 years of issuance of a building permit for such conversion should be considered in calculating exemption and abatement benefits under this program.

        For non-residential buildings of 100,000 or more square feet of aggregate floor area, and for which full exemption and abatement benefits are being sought, only the aggregate floor area for which a certificate of occupancy for multiple dwelling use has been issued within 5 years of issuance of a building permit for such conversion should be considered in calculating the exemption and abatement.

        Where benefits for partial exemption and partial abatement of real property taxes are being sought, only the aggregate floor area for which a certificate of occupancy for multiple dwelling use is issued within 3 years of issuance of a building permit for such conversion exclusive of commercial, community facility or accessory use space should be considered in calculating such partial exemptions and abatements. Partial exemption benefits are limited to the amount of assessed value attributable exclusively to the physical improvement resulting from the conversion of at least 50% of the aggregate floor area of an eligible building that received a temporary certificate of occupancy. Such partial abatement benefits are limited to the amount of real property taxes which would have been due during the first year of such partial abatement but for such partial abatement upon the amount of square feet of aggregate floor area of the non-residential structure which has received a temporary certificate of occupancy for conversion to at least 50% of the aggregate floor area. However, if the tax lot during the first year of such partial abatement was partially or wholly exempt from real property taxes under other programs, then the partial abatement is equal to the amount of real property taxes which would have been due upon the amount of square feet of aggregate floor area of the non-residential area except for such full or partial exemption.

    2. Special Ad Valorem Levies and Special Assessments: No exemption allowed.
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    48820

    Assessment Roll Section(s): Taxable.

    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.

  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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