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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Multiple Dwellings

Section 4.07 - PHFL Section 93(6)

Limited-Dividend Housing Companies
(UDC subsidiary)
PHFL Section 93(6)

Exemption Code(s): 48540 Year Originally Enacted: 1968

Related Statutes: None

SUMMARY: Property that (1) is owned or under the control of a limited-dividend housing company that is a subsidiary of the NYS Urban Development Corporation (UDC), or (2) was once owned by such a housing company and has been sold to another limited-dividend housing company, with the approval of the State Commissioner of Housing, and (3) is used for low-income or moderate-income housing is partially exempt from taxation, but is liable for special ad valorem levies and special assessments. The amount of the exemption is limited to that part of the assessed value which exceeds the value of the property at the time of acquisition by the original limited-dividend housing company. Duration of the exemption is limited to the period during which the mortgage loans of the original housing company are outstanding, but in no event for a period of more than 40 years.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Land and improvements must be owned or under the control of a limited-dividend housing company which is a subsidiary of the UDC or must have been acquired by a limited-dividend housing company from such a UDC subsidiary. To qualify as a UDC subsidiary, more than half of the voting shares of the housing company must be held or owned by the UDC or more than half of the directors, trustees, or members of the company must be UDC designees. The specific organizational requirements are as follows:

      Limited-dividend housing company organized between 5/10/26 and 6/30/39 under State Housing Law of 1926:

      Laws under which incorporation required: L. 1926. ch. 823 (State Housing Law - repealed effective 7/1/39).

      Restrictions on corporate purposes or activities as stated in certificate of incorporation: (1) Company must be organized exclusively to acquire, construct, maintain, and operate housing projects authorized by the State Board of Housing or other appropriate state authority and (2) no stockholder of the corporation may receive, in repayment of his investment, any sum in excess of the par value of the stock, together with cumulative dividends at the rate of 6% per year.

      Limited-dividend housing company (other):

      Laws under which incorporation required: PHFL Article 4.

      Restrictions on corporate purposes or activities as stated in certificate of incorporation: (1) Company must be organized exclusively to acquire, construct, maintain, and operate housing projects subject to the supervision of the State Commissioner of Housing or other state authority and (2) no stockholder of the company may receive, in repayment of his investment or interest in the company's capital, any sum in excess of the par value of the stock, or the amount of his contribution to or beneficial interest in capital, together with cumulative distributions on capital at the rate of 6% per year.

    2. Property Location Requirements: None.
    3. Property Use Requirements: Property must be used for housing for low-income or moderate-income persons or families. For a description of the income limits for low-income persons, see Chart ID, PHFL Article 4, §85-a. The statute sets no limits on the income of moderate-income persons.
    4. Certification by State or Local Government: None required.
    5. Required Construction Start Date or Other Time Requirement: None.
  2. LOCAL OPTION: Not for the initial exemption. However, an existing exemption may be extended for an additional period following the expiration of the initial tax exemption period (see Limitations on Exemption below).
  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 Yes** Yes** 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 exemption is limited to that part of the assessed value which exceeds the value of the property at the time of acquisition by the original limited-dividend housing company.

    **Duration of the exemption is limited to the period during which the mortgage loans of the original housing company are outstanding, but in no event for a period of more than 40 years.

    After the tax exemption period has expired, any project that received this exemption may be granted an additional tax exemption period of up to 50 years, or until such time as the project no longer complies with the operating requirements of the Mitchell Lama Program, whichever is sooner.

  4. PAYMENTS IN LIEU OF TAXES: None required.
  5. CALCULATION OF EXEMPTION:
    1. General Municipal and School District Taxes: 100% of that part of the assessed value which exceeds the value of the property at the time of acquisition by the original limited-dividend housing company.
    2. Special Ad Valorem Levies and Special Assessments: No exemption allowed.
  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    48540

    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.

  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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