Exemption Administration Manual, Part 2: Industrial, Commercial, and Public Service—Section 4.06 - RPTL Section 485-a: Mixed-use Properties outside New York City

Assessor Manuals

Section 4.06 - RPTL Section 485-a: Mixed-use Properties outside New York City

Exemption code(s):

4759_

Year originally enacted:

2002

Related Statutes:

None.

Summary:

To the extent allowed by local option, properties that are modernized, rehabilitated, expanded, or improved to a mix of residential and commercial use, and which are located in certain municipalities outside New York City (see Location Requirements), are partially exempt from taxation and special ad valorem levies according to a twelve year declining schedule, but liable for special assessments.  The cost of such construction work must exceed $10,000.  At least forty percent of the square footage of the building or structure must be devoted to or used for residential purposes and at least fifteen percent for commercial purposes.  The property must employ or anticipate employing at least five employees primarily at the property. Property receiving this exemption may not concurrently receive any other exemption, except under certain conditions (see Calculation of Exemption below).   Recipients of the exemption must annually file a certification of continued eligibility (see Filing Requirements)

Eligibility requirements

Ownership requirements:

Facility must be owned or operated by a private or public individual or organization.

Property location requirements:

Property must be located in a municipality, which for purposes of this exemption means any city, town, or village except for a city with more than one million inhabitants. (This currently excludes New York City.)

Property use requirements:

The property must contain a mix of commercial and residential use.   At least forty percent of the square footage of the building or structure must be devoted to or used for residential purposes and at least fifteen percent for commercial purposes.   Eligible commercial use includes, but is not limited to the buying, selling or providing of goods directly to the public, office, hotel, retail store, brewery, distillery, restaurant, café, bar or tavern, gymnasium, theater, or entertainment venue.  The property must employ or anticipate employing at least five employees primarily at the property.

The cost of conversion must exceed $10,000 or a greater amount as may be specified in local law (see Local Option).  Such conversion costs may not include ordinary maintenance and repairs.

Certification by state or local government:

None.

Required construction start date or other time requirement:

Exemption applies only to construction that commenced subsequent to the date on which the eligible city's local law has taken effect (see Local option below).

The exemption may be revoked if the section of the building devoted to commercial purposes has not been in active use for three consecutive years.

Local option

Yes. Each eligible municipality may choose:

1. to allow the exemption, and
2. to require that the eligible cost of conversion exceeds $10,000. The option to exempt and to set a conversion cost minimum in excess of $10,000 must be exercised through a local law (after a public hearing). Upon the municipality's adoption of such a local law, the county in which the municipality is located may enact a local law allowing the exemption and, if desired, requiring a conversion cost minimum in excess of $10,000. Likewise, any school district, other than the fiscally dependent school districts of Buffalo, Rochester, Syracuse, and Yonkers, that comprises at least some part of such city may pass a resolution allowing the exemption and further requiring a conversion cost minimum greater than $10,000.

Limitation on exemption

*Amount is limited to the increase in assessed value attributable to conversion to mixed residential and commercial use.
**If allowed by local option (county and school district options are conditional on city, town, or village adoption of exemption).

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

The amount of the exemption is calculated as a percentage of the "exemption base," which is the increase in assessed value of the property attributable to conversion to a mixed-use property. This base should be determined for each year in which there is an increase in assessed value attributable to conversion from that of the previous year's assessed value. The exemption is computed as indicated below: 

Special ad valorem levies and special assessments:

See General municipal and school district taxes above, in the case of special ad valorem levies for county and county district purposes (special ad valorem levies for other purposes do not apply with this exemption). No exemption allowed for special assessments.

Note: This exemption may not be granted concurrent with or subsequent to any other exemption granted to the same improvements to the property, except, where during the period of any such prior exemption, payments in lieu of taxes or other payments were made to the local government in an amount that would have been equal to or greater than the amount of real property taxes that would have paid on the improvements had the property received this exemption. In this particular situation, an exemption should be granted for 12 years less the number of years the property would have been previously exempt from taxation.

Coding of exemption on assessment roll

Assessment roll section(s):

Taxable (RPS Section 1).

NOTE: This code should not be used to identify property which is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute which applies.

Filing requirements (owner or occupant of property)

Form RP-485-a, Application for Partial Real Property Tax Exemption .for Residential-Commercial Urban Exemption Program.

Form RP-485-a-C, Certification of Eligibility for Residential-Commercial Urban Exemption Program

Reporting requirements (assessor)

None.

Similar exemptions

Exemption application forms

Form RP-485-a
Form RP-485-a-C

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