Assessor Manuals, Exemption Administration: RPTL Section 421-o

Exemption Administration Manual—Part 1: Residential—Other than multiple dwellings

Section 4.01 - RPTL Section 421-o: Multiple dwellings converted to owner occupied residences in certain cities

Exemption code(s):

44263

Year originally enacted:

• §421-o City of Corning - 2016
• §421-o City of Hornell  - 2016

Related statutes:

RPTL §421-h, i, j, k, n

Summary:

To the extent allowed by local option, multiple dwelling buildings that are located in certain cities and reconstructed, altered, or improved back to a single family dwelling under certain conditions (see below) are partially exempt from city taxes and special ad valorem levies, but are liable for county and school district taxes, county special ad valorem levies, and special assessments. The amount of the exemption is limited to a percentage of the increase in assessed value attributable to the reconstruction, alteration, or improvement. The duration of the exemption is limited to 12 years. Qualified cities may limit the types of construction projects eligible for exemption and the percentages of exemption. (This exemption is currently applicable only upon adoption by the following cities: Corning (Steuben County) and Hornell (Steuben County). 

Eligibility requirements:

Ownership requirements:

Property must be owned by a private individual or organization. If title to the property is transferred to someone other than the heirs or distributees of the owner, the exemption must cease.

Property location requirements:

The property must be located in a city that meets the following population requirements:

Property must be located in cities having a population of more than 8,000, but less than 9,000 persons, that is located in a county with a population of greater than 97,000 but less than 99,000, as determined by the latest federal census. Based on the latest census, i.e. 2010, only the City of Hornell (Steuben County) currently satisfies this criterion.

Property must be located in cities having a population of more than 10,000, but less than 12,000 persons, that is located in a county with a population of greater than 97,000 but less than 99,000, as determined by the latest federal census. Based on the latest census, i.e. 2010, only the City of Corning (Steuben County) currently satisfies this criterion.

Property use requirements:

Property must be used as an owner-occupied single-family residence. The value of the construction project must exceed $5,000 and must be of the type allowed exemption by the taxing jurisdiction (see Local Option below); the project may not be one of ordinary maintenance or repairs. The greater portion of the property, as measured by the square footage of both the original property and the improvement, must be at least five years old.

Certification by state or local government:

None required.

Required construction start date or other time requirement:

Reconstruction, alteration, or improvement of the property must have commenced after the effective date of the local law allowing the exemption.

Local option: 

Yes. Local taxing jurisdictions are allowed several choices:

1. Exemption:

A city meeting the population requirements may choose whether or not to allow the exemption. The option to exempt must be exercised by the city through the adoption of a local law after a public hearing has been held.

2. Percentage of Exemption:

A qualified city allowing the exemption may reduce the percentage of exemption allowed in each year by state law (see Calculation of Exemption below).

3. Maximum Value of Improvement:

State law limits the exemption to a maximum of $100,000 in increased market value. Qualified cities may reduce this maximum to any amount less than $100,000, but not less than $10,000.

4. Type of Improvement:

In its local law allowing the exemption, a qualified city may limit the forms of eligible reconstruc­tion, alteration, or improvement eligible. It may further limit exemption to improvements that would otherwise result in an increase in the assessed value of the property, but that consist of addition to or remodeling or modernization of an existing residence to prevent physical deterioration or to comply with applicable building, sanitary, health, or fire codes.

Limitation on exemption

 *See Calculation of Exemption below.
 ** If allowed by local option.

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

This exemption is for city taxes and special ad valorem levies only. The extent of the exemption is determined by the exemption base and the percentage of that base allowed as exempt each year. The exemption base is defined as the increase in assessed value as determined in the initial year of the term of exemption, except as follows.

In any year in which a change in level of assessment of 15% or more is certified for a final assessment roll pursuant to the rules of the State Office of Real Property Tax Services, the exemption base must be multiplied by the following fraction:

               Total assessed value of parcel on final assessment roll*
________________________________________________________________
   Total assessed value of parcel on immediately preceding final assessment roll

* After accounting for physical or quantity changes to parcel since immediately preceding assessment roll.  

Unless limited by local law, the exemption equals the base exemption, or the base exemption adjusted as described above, multiplied by one of the following percentages:

Qualified cities may reduce the percentage of exemption for any year. See local option

The maximum exemption allowed by state law is $100,000 in increased market value due to the improvement.  The market value of the new construction is calculated by dividing the increase in assessed value attributable to the construction by the latest state equalization rate or special equalization rate, unless such rate is 95% or more, in which case the increased assessed value is to be considered equal to the market value.  Qualified cities may reduce the maximum exemption allowed to any amount less than $100,000, but that amount may not be less than $10,000. 

If any part of a parcel is fully or partially removed due to fire, demolition, destruction, or new exemption, the exemption amount must be reduced proportionally.

If the revaluation assessment of a property is reduced due to a Small Claims or Tax Certiorari action, the exemption amount should be recomputed accordingly.

Special ad valorem levies and special assessments:

Special ad valorem levies are exempt to the same extent as city taxes. No exemption is allowed for special assessments.

Coding of exemption on assessment roll

Assessment roll section(s):

Taxable (RPS Section 1).

Note: These codes should not be used to identify property that is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute that applies.

Filing requirements (owner or occupant of property)

Form RP‑421-o, Application for Real Property Tax Exemption for Capital Improvements to Multiple Dwelling Buildings within Certain Cities.

Reporting requirements (assessor)

None.

Similar exemptions

None.

Application form(s)

Form RP‑421-o, Application for Real Property Tax Exemption for Capital Improvements to Multiple Dwelling Buildings within Certain Cities.

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