Exemption Administration Manual—Part 2: Multiple dwellings and urban renewal—Section 4.07 - RPTL Section 467-b: Rent-controlled or rent-regulated property occupied by senior citizens or persons with disabilities

Assessor Manuals

Section 4.07 - RPTL Section 467-b: Rent-controlled or rent-regulated property occupied by senior citizens or persons with disabilities

Exemption code(s)

Not applicable (see Coding of abatement on assessment roll below).

Year originally enacted:

1972

Related statutes:

None.

Summary:

To the extent allowed by local option, rent-controlled and rent-regulated multiple dwellings that are occupied by senior citizens or persons with a disability are eligible for an abatement in taxes levied in an amount equal to the rent increase exemptions actually credited to eligible heads of households. Such property is liable for special ad valorem levies and special assessments. The abatement is not allowed for any dwelling unit occupied by a household whose income exceeds $4,000 or a higher maximum amount set by local law, ordinance, or resolution (not to exceed $50,000).

In New York City the abatement applies even if the building is reclassified from one category to another (for example, from rent-controlled to rent-regulated).

Note: Municipalities which provide rental increase protection under this program to disabled persons must ensure that such recipients continue to receive such protection once they become eligible for this program as senior citizens.  Furthermore, no municipality may establish eligibility standards for this program that are based on criteria not set forth in statute.

Eligibility requirements

Ownership requirements:

Property must be owned by a private individual or organization.

Property location requirements:

Property must be located in a municipality that requires rent control or rent regulation under the Emergency Tenant Protection Act of 1974.

Property use requirements:

1. Property must be occupied by senior citizens or persons with a disability. Specifically, the head of the household must be a person who is 62 years of age or older or a person with a disability. An eligible person with a disability must currently receive Social Security Disability Insurance (SSDI) benefits, Supplemental Security Income (SSI) benefits, or disability pension or disability compensation benefits provided by the United States Department of Veterans Affairs or the United States Postal Service, or must be a person who previously received SSI or SSDI disability benefits and is currently receiving medical assistance benefits based on a determination of disability pursuant to Social Services Law §366. The combined income for the current income tax year of all members of a household occupying a dwelling whose head of household is a person with a qualified disability must not exceed the maximum income at which the disabled person would be eligible to receive cash SSI benefits under federal law during the tax year.
2. The combined income of all members of the household occupying the dwelling unit must not exceed $4,000 or the maximum amount set by local option (for definition of income" see Chart ID, RPTL §467-b).
3. An otherwise qualified head of household is eligible to receive an abatement if such head of household occupies two contiguous and connected dwelling units as a combined residence, both of which are eligible for this abatement and such head of household has occupied and paid rent on both units for at least two years. Only one head of household may be issued an abatement order for each eligible pair of contiguous and connected dwelling units.
4. Where a head of household who holds a current, valid tax abatement certificate dies or permanently leaves the household as specified  in  rules promulgated by the administrative agency,  a  surviving  member  of  the household  who  is eligible under this section may apply to transfer the rent increase exemption from the head of household who has died or permanently left the household  into  their name and continue the exemption as the new head of household. The option to transfer the rent increase exemption shall be available for a period of six months after the head of household dies or permanently leaves the household or ninety days after the  date  of notice from the administrative agency informing the household that the rent increase exemption benefit has expired upon  the death  of  the  head of household, whichever is later.
5. Where a head of house hold who has received a rent increase exemption order that has expired and who, upon renewal application for the period commencing immediately after expiration is determined to be ineligible because of income may submit a new application during the following calendar year and if granted the tax abatement amount shall be calculated as if the prior rent increase exemption order never expired.  No head of household may receive more than three rent increase exemption orders calculated in this way.

Certification by state or local government:

The head of household of each dwelling unit must apply every two years to the appropriate rent control agency or administrative agency for a tax abatement certificate. Copies of the certificate must be issued by the agency to the owner of the property and to the collecting officer responsible for collecting real property taxes in the municipality allowing the abatement.

Required construction start date or other time requirement:

None.

Local option

Yes. Each county, city, town, village, and school district in which the property is located may choose whether or not to allow the abatement, may choose the basis on which abatement will be allowed (household income or shelter allowance), and may set the maximum limit on tenant income. The option must be exercised through adoption of a local law, ordinance, or resolution (after a public hearing).a

Limitation on exemption

*The type of rent exemption/tax abatement allowed is determined by local law but may not exceed, for each dwelling unit, the following amounts:

1. Exemption based on household income (where the head of household does not receive a monthly shelter allowance pursuant to the Social Services Law): the amount by which the rent exceeds one-third of the combined income of all members of the household.
2. Exemption based on shelter allowance (where the head of household does receive a monthly shelter allowance): the amount by which the rent exceeds the maximum shelter allowance that the head of household is entitled to receive. 
   
   If the combined income of the household decreases by more than 20%, the household is entitled to an increase in rent exemption and the owner of the multiple dwelling a corresponding increase in tax abatement. The resulting adjusted rent, however, must not be less than one-third of the household's income or less than the shelter allowance. For the purposes of calculating adjusted rent, a decrease in household income may not include any decrease attributable to changes in the statutory definition of income made after April 1, 1987. See Chart ID, Limit on Income, Note (f).
   
   When a head of household having a current, valid tax abatement certificate moves his principal residence to another dwelling unit in the same municipal corporation, he is entitled to a rent exemption equal to (1) the amount by which the rent for the new dwelling unit exceeds the last rent, as reduced by rent exemption, payable in the original dwelling unit, (2) the most recent amount deducted by rent exemption from the rent in the original dwelling unit, or (3) where the head of household does not receive a shelter allowance, the amount by which the rent for the new dwelling exceeds one-third of household income, whichever is least.

**If allowed by local option.

Payments in lieu of taxes

None required.

Calculation of exemption

General municipal and school district taxes:

The amount of tax abatement is deducted from the total taxes levied on the property. If both a town and a village allow the abatement under RPTL §467-b, deduction is first made from village taxes and any excess is then deducted from town taxes. 

Upon the vacancy of a dwelling unit for which an abatement certificate has been issued, the owner of the building must remit a prorated portion of the tax abatement to the collecting officer of the municipal corporation which granted the abatement, and any amount due by reason of such vacancy becomes a lien on the property on and after the date of the vacancy.

In New York City, local law may provide that, in the event the tax abatement certificate authorizes an amount of deduction in excess of the quarterly tax installment, then the balance may be applied to any subsequent installment until exhausted, provided that, at the request of the owner, such balance shall be paid to the owner in lieu of being applied to any subsequent installment, except where the owner is in arrears in the payment of taxes on any property.

Special ad valorem levies and special assessments:

No abatement allowed.

Coding of abatement on assessment roll

Note: Since the abatement allowed here is a reduction in actual taxes levied rather than a reduction in assessed value, no exemption code should be used and no dollar amount should be entered in the exempt value" section of the assessment roll.

Filing requirements (owner or occupant of property)

None.

Reporting requirements (assessor)

None.

Similar exemptions

See Chart IA and Chart IB.

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