Assessor Manuals, Exemption Administration: RPTL Section 457-a

Assessor Manuals

Exemption Administration Manual, Part 2, Section 4.07 - RPTL Section 457-a: Residential Property Transferred to Low-Income Household 

Exemption code(s)

4420_

Year originally enacted:

2025

Related statutes:

EDNL Art. 52; NPCL Art. 16; US IRC §§ 501(c)(3) and 501(c)(4)

Summary:

Where allowed by local option, eligible residential property transferred to and occupied by a low-income household is partially exempt from taxation and special ad valorem levies (but not special assessments). The amount of the exemption is at least 25% but not more than 75% of the assessed value of the eligible residential real property, depending on local option.

Eligibility requirements

Ownership requirements:

The property must have been transferred to a qualified low-income household or a community land trust.

To be considered a qualified low-income household for this purpose, a household must have an income upon initial occupancy of the residential property of not more than 80% of the area median income, which is defined annually by the United States Department of Housing and Urban Development.

If the property consists of land that has been transferred to a community land trust, it may qualify if a residential building is on the land and the residential building has been or will be leased or sold to a qualified low-income household.

Property location requirements:

The property must be located in a county, city, town, village, or school district that has adopted a local law or resolution to provide this exemption.

Property use requirements:

The property must be subject to a restrictive covenant or declaration, legal requirement, regulatory agreement or other contractual obligation with a governmental entity, nonprofit housing organization, or land bank, and either:

• The property has been transferred to a qualified low-income household, or,
• the property consists of land that has been transferred to a community land trust and a residential building is situated on the land and the residential building has been or will be leased or sold to a qualified low-income household.

In addition, the property must be the primary residence of a qualified low-income household or the qualified low-income household must have agreed to occupy the property as a primary residence. To be considered a qualified low-income household for this purpose, a household must have an income upon initial occupancy of the residential property of not more than 80% of the area median income, which is defined annually by the United States Department of Housing and Urban Development.

The exemption will be discontinued if the property:

• ceases to be used primarily for residential purposes,
• ceases to be used as a primary residence; or
• is transferred to another person or entity, other than to any heirs or beneficiaries of the owner that meet the requirements of being a qualified low-income household at the time of the transfer.

Certification:

A household must be certified by a nonprofit housing organization, community land trust, land bank, or appropriate governmental entity as meeting the income and residency criteria to be considered a qualified low-income household. The certifying entity must determine the income and assets that will be used to determine a household’s income for eligibility purposes.

Required construction start date or other time requirement:

None

Local option

Yes - The legislative body or governing board of any county, city, town, or village, may, after public hearing, adopt a local law opting in to this exemption. Additionally, a school district, other than a school district covered by Article 52 of the Education Law, may adopt a resolution opting in to this exemption.

Limitation on exemption

*If allowed by local option.

Payments in lieu of taxes

Not applicable.

Calculation of exemption

General municipal and school district taxes:

Yes, at least 25% but not more than 75% of assessed value, depending on local option.

Special ad valorem levies and special assessments:

Special ad valorem levies:

Yes, at least 25% but not more than 75% of assessed value, depending on local option.

Special assessments:

No exemption allowed.

Coding of exemption on assessment roll

4420_

Assessment roll section(s):

Taxable (RPS Section 1).

Filing requirements (owner or occupant of property)

File Form RP-457-a, Application for Exemption for Eligible Residential Property Transferred to Low-Income Household.

Reporting requirements (assessor)

None.

Exemption application forms

• Form RP-457-a, Application for Exemption for Eligible Residential Property Transferred to Low-Income Household.
• RP-457-a-i, Instructions for Form RP-457-a

Similar exemptions

None.

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