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Assessor's Manual, Volume 4, Exemption Administration

 Exemption Administration Manual - Part 2
Multiple Dwellings
Section 4.07 - RPTL Section 421-m 

Certain New or Substantially Rehabilitated Multiple Dwellings outside
New York City

Exemption Code(s): 4883_ 

Year Originally Enacted:  2011 

Related Statutes:  RPTL §§ 420-c, 421-a

SUMMARY:  To the extent allowed by local option, multiple dwellings constructed or substantially rehabilitated in a benefit area as designated in local law and where at least 20 percent of the units are affordable to individuals and family of low to moderate income are exempt from taxation for city, town, or village purposes, and town special ad valorem levies, but liable to special assessments.  The duration of the exemption benefit is for up to 23 years.  Upon adoption of such a local law, any other municipal corporation in which the designated benefit area is located may likewise offer this exemption from taxation and special ad valorem levies in local law, or in resolution by the school district(s). This exemption is not available in New York City or in any city, town, or village whose governing body has adopted a local law allowing the  exemption pursuant to RPTL §421-c.  Furthermore, the property receiving this exemption may not be simultaneously receiving any other property tax exemption.  

 A.    ELIGIBILITY REQUIREMENTS: 

1.    Ownership Requirements: Property must be owned by a private individual or organization.   

2.    Property Location Requirements:  Property must be located outside New York City and any city, town or village that has allowed the New Multiple Dwelling exemption (under RPTL §421-c) in its local law.  Furthermore, the eligible project must be located in a "benefit area," defined as the area within a city, town or village to which this exemption applies, as designated in local law. 

3.  Property Use Requirements: For purposes of this exemption, a multiple dwelling means a dwelling, other than a hotel, which is to be occupied or is occupied as the residence or home of three or more families living independently of one another, whether such dwelling is rented or owned as a cooperative or condominium.  Also, substantial rehabilitation means all work necessary to bring a property into compliance with all applicable laws, and regulations including but not limited to the installation, replacement or repair of heating, plumbing, electrical and related systems and the elimination of all hazardous and immediately hazardous violations of the structure in accordance with state and local laws and regulations.  Substantial rehabilitation may also include reconstruction of work to improve the habitability or prolong the useful life of the property; however, this does not include ordinary maintenance or repairs.

The construction or substantial rehabilitation must take place on vacant, predominantly vacant or under-utilized land, or on land containing one or more substandard and structurally unsound dwellings, or a dwelling that has been certified as unsanitary by the local health agency. 

Construction or substantial rehabilitation must be carried out with the assistance of grants, loans or subsidies from
a federal, state, or local agency.          

 At least 20 percent of the multiple dwelling units must be affordable to individuals or families of low and moderate income, whose incomes at the time of initial occupancy do not exceed 90 of the area median income, adjusted for family size, and where the individual or family pays rent that does not exceed more than 30 percent of their adjusted gross income as reported on their federal income tax return (or would be reported if such return were required), less such personal exemptions and deductions and medical expenses (verified according to procedures established by the Division of Housing and Community Renewal).           

Where the property is used partially as a multiple dwelling and also for commercial or other purposes, the property is eligible for this exemption only if the square footage of the portion used as a multiple dwelling comprises at least 50 percent of the total square footage of the property.

4.  Certification by State or Local Government:  A city, town, or village which provides this exemption must verify that the project complies with the affordability requirements (see Property Use requirements above), and also with locally adopted procedures.  Such verification must be done annually and in accordance with procedures established by the New York State Division of Housing and Community Renewal (DHCR)  before the municipality can provide the exemption.  If such requirements are not met, the multiple dwelling cannot receive the exemption in that year.  

5.  Required Construction Start Date or Other Time Requirement: The construction or substantial rehabilitation must have begun on or after the effective date of the city, town or village local law allowing the exemption, but no later than June 15, 2019.  (See B. Local Option below).

   
B.     LOCAL OPTION:  Yes - Each eligible city, town or village may choose whether or not to allow the exemption, and designate the benefit area in which the    exemption applies.  The option to exempt must be exercised through 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 (see A. 3. Property Location Requirements above) may pass a local law allowing the exemption (or may pass a local resolution, in the case of the school district(s)).

C.        LIMITATION ON EXEMPTION: 

 

General
Municipal
Taxes

School
District
Taxes

Special
Ad Valorem
Levies

Special
Assessments

1.  Amount

Yes*

Yes*

Yes*

No
Exemption
Allowed

2.  Duration

Up to 23
Years*

Up to 23
Years*

Up to 23
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

  *     See Calculation of Exemption below.

**     If allowed by local option (municipal and school district options conditional on initial adoption of exemption by city, town or village).

D.        PAYMENTS IN LIEU OF TAXES: None required.

E.        CALCULATION OF EXEMPTION: 

 1.   General Municipal and School District Taxes, and Special ad Valorem Levies:
      
The following percentages of assessed value are eligible for exemption:
            During construction or substantial rehabilitation:                        100%
            (maximum of three years)

            After completion of the multiple dwelling project:  
                        Years 1 through 12                                                     100%
                        Years 13-14                                                                80%
                        Years 15-16                                                                60%
                        Years 17-18                                                                40%
                        Years 19-20                                                                20%

Note: While not affecting the calculation of exempt value for assessment roll purposes, the owner of the eligible project is annually liable for the amount of taxes payable in the tax year preceding the start of construction.

            2.  Special Assessments:  No exemption allowed.   

F.        CODING OF EXEMPTION ON ASSESSMENT ROLL:

               Code                       Description of Alternative Codes Possible
                4883_                    

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. 

G.        FILING REQUIREMENTS (Owner or Occupant of Property):
  

            Form RP-421-m - Application for Real Property Tax Exemption for Certain New or
            Substantially Rehabilitated Multiple Dwellings           

            Application required first year only.  Form may be downloaded and printed.

H.        REPORTING REQUIREMENTS (Assessor):  None. 

I.         SIMILAR EXEMPTIONS:  See Charts IA and IB.

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