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Assessor Manuals, Exemption Administration

Exemption Administration Manual—Part 2: Multiple dwellings and urban renewal

Section 4.07 - RPTL Section 423: Redevelopment company housing projects (continuation (phase out) of other housing exemption)

Exemption code(s)

4869_

Year originally enacted:

1974

Related statutes:

PHFL § §125, 127

Summary:

New or rehabilitated dwellings that:

  1. Are located in substandard or in sanitary areas,
  2. are owned by redevelopment companies,
  3. are used for low-income or moderate-income housing,
  4. have come to the end of the exemption period specified by the contracting municipality in accordance with the provisions of PHFL §125, and
  5. have not had such contracted exemption period extended are partially exempt from general municipal and school district taxes, but are liable for special ad valorem levies and special assessments. The duration of the exemption under RPTL §423 is limited to a period of 9 years, except in New York City, where the duration of this exemption is contingent on the property's exemption benefit period under PHFL §125.

Eligibility requirements

Ownership requirements:

Property must be owned or under the control of a redevelopment company. The organizational requirements are as follows:

  • Laws under which incorporation required: PHFL Article 5.
  • Restrictions on corporate purposes or activities as stated in certificate of incorporation:
    1. Company must be organized to plan, construct, own, maintain, operate, sell, and convey housing, commercial, cultural, or recreational facilities subject to the supervision of the State Superintendent of Insurance, the NYC Department of Housing Preservation and Development, or the comptroller or other chief fiscal officer of a municipality outside New York City, as appropriate, and
    2. interest paid by the company on outstanding debentures may not exceed 6% per year; annual distributions to shareholders, partners, or beneficiaries of a trust may not exceed 6% of the company's total capital.

Property location requirements:

None.

Property use requirements:

Property must be used primarily for housing for low-income or moderate-income persons or families. For a description of the income limits for low-income tenants, see Chart ID, PHFL Article 5, 125, 126. The statute sets no limits on the income of moderate-income tenants. Portions of the property may be used for business, commercial, cultural, or recreational purposes if they are appurtenant to the housing project and have been approved by the NYC Department of Housing Preservation and Development or the comptroller or other chief fiscal officer of a municipality outside New York City, as appropriate.

Certification by state or local government:

None required.

Required construction start date or other time requirement:

None.

Local option

No.

Limitation on exemption

Limitation on exemption by amount, duration, and taxing jurisdiction
General municipal taxes School district taxes Special ad valorem tax Special assessments
1. Amount Yes* Yes* No exemption allowed No exemption allowed
2. Duration 9 years** 9 years** No exemption allowed No exemption allowed
3. Taxing jurisdiction
a. County or county special districts Ex NA Tax Tax
b. City Ex NA NA Tax
c. Town or town special district Ex NA Tax Tax
d. Village Ex NA NA Tax
e. School district NA Ex NA NA
Ex-Exempt     Tax-Taxable     NA-Not Applicable

*Amount of the exemption is limited to the amount of assessed value approved by the local option provision of PHFL §125, but taxes payable for any given year are determined in accordance with the formula described under Calculation of Exemption below.
** Redevelopment projects located in New York City may not receive this exemption in any year in which the combined period of benefits under this exemption and the exemption provided under PHFL §125 would exceed 60 years.

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

Amount of the exemption is limited to the amount of the assessed value exempted by the local option provision of PHFL §125, but taxes payable for any given year are determined in accordance with the following formula: 

General municipal and school district taxes:
Year after termination of exemption under PHFL §125 Taxes which will be payable
First Y0 + 1/10(Y1 without ex. - Y0)*
Second Y1 + 1/9(Y2 without ex. - Y1)
Third Y2 + 1/8(Y3 without ex. - Y2)
Fourth Y3 + 1/7(Y4 without ex. - Y3)
Fifth Y4 + 1/6(Y5 without ex. - Y4)
Sixth Y5 + 1/5(Y6 without ex. - Y5)
Seventh Y6 + 1/4(Y7 without ex. - Y6)
Eighth Y7 + 1/3(Y8 without ex. - Y7)
Ninth Y8 + ½(Y9 without ex. - Y8)
Tenth No Exemption

*Y0 = Taxes paid in last year of PHFL §125 exemption.
Y1 = Taxes paid in first year of RPTL §423 exemption.
Y2 = Taxes paid in second year of RPTL §423 exemption.
Etc.

Y1 without ex. = Taxes that would have been payable in the first year after expiration of PHFL §125 exemption without the RPTL §423 exemption.
Y2 without ex. = Taxes that would have been payable in the second year after expiration of PHFL §125 exemption without RPTL §423 exemption.
Etc.

Special ad valorem levies and special assessments:

No exemption allowed.

Coding of exemption on assessment roll

Coding of exemption on assessment roll
Code Description of alternative codes possible
4869_

Assessment roll section(s):

Taxable (RPS Section 1).

Note: This code should not be used to identify property that is exempt under the provisions of PHFL § §125, 127 (first exemption) or is exempt under any of the statutes listed under Similar exemptions below.

Filing requirements (owner or occupant of property)

None.

Reporting requirements (assessor)

None.

Similar exemptions

See Chart IA and Chart IB.

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