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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Multiple Dwellings

Section 4.07 - RPTL Section 423

Redevelopment Company Housing Projects
(Continuation (phase out) of other housing exemption)
RPTL Section 423

Exemption Code(s): â  â  4869_

Year Originally Enacted: â  â  1974

Related Statutes: â  â  PHFL § §125, 127

SUMMARY: â  â  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.

  1. ELIGIBILITY REQUIREMENTS:
    1. 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.

    2. Property Location Requirements: None.
    3. 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.
    4. Certification by State or Local Government: None required.
    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 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-Exemptâ â â â â â Tax-Taxableâ â â â â â 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.

  4. PAYMENTS IN LIEU OF TAXES: None required.
  5. CALCULATION OF EXEMPTION:
    1. 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:
      Year After Termination of
      Exemption under PHFL §125
      Taxes Which Will Be Payable
      First
      Second
      Third
      Fourth
      Fifth
      Sixth
      Seventh
      Eighth
      Ninth
      Tenth
      Y0 + 1/10(Y1 without ex. - Y0)*
      Y1 + 1/9(Y2 without ex. - Y1)
      Y2 + 1/8(Y3 without ex. - Y2)
      Y3 + 1/7(Y4 without ex. - Y3)
      Y4 + 1/6(Y5 without ex. - Y4)
      Y5 + 1/5(Y6 without ex. - Y5)
      Y6 + 1/4(Y7 without ex. - Y6)
      Y7 + 1/3(Y8 without ex. - Y7)
      Y8 + ½(Y9 without ex. - Y8)
      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.

    2. Special Ad Valorem Levies and Special Assessments: No exemption allowed.
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    CodeDescription 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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