Relates to real property tax exemptions for certain private homes from local taxation in N.Y. city

4 Co-sponsors

• Ruben Diaz
• Andrew J. Lanza
• George Onorato
• Antoine M. Thompson

Title of bill

An act to amend the real property tax law, in relation to exemption of certain private homes from local taxation in cities with a population of one million or more

Summary of specific provisions

This proposed bill would add a new section 421-L to the Real Property Tax Law that would exempt newly constructed private homes containing not more than three dwelling units in cities with a population of one million or more from all local and municipal taxes, other than assessments for local improvements, during the tax year or years next following the first taxable status date after the later to occur of the completion of construction or the sale to the initial purchaser of such new home (or a unit therein if such home is in a condominium form of ownership). For private homes containing less than four dwelling units, there would be two years of one hundred percent exemption followed by a six year phase-out. Such projects would continue to pay taxes on the value of the land appearing on the assessment roll in the first year after completion of construction. The maximum exemption amount, which is based on purchase price, for a home containing one dwelling unit is $671,000, a home containing two dwelling units is $755,540, or a home containing three dwelling units is $914,750. Any home which whose sale price exceeds the limits but less than $950,000 will receive an exemption for the value up to the maximum exemption. If the sale price exceeds $950,000, the home will not be eligible for any benefits. In the case of a home containing less than four units in a condominium form of ownership, the exemption would be $400,000 for an individual condominium unit. The newly constructed home must be owner occupied, designed and operated exclusively for residential purposes, and used in accordance with its certificate of occupancy. If a home is fully demolished and removed to make way for a newly constructed home, such newly constructed home would not be eligible for these tax exemption benefits if less than three years have elapsed between the date of issuance of the permit authorizing such demolition and removal and the date that the new home commences construction.

Justification

Real Property Tax Law Section 421-b formerly provided a similar eight-year tax exemption for certain one and two-unit multiple dwellings, but that exemption is only available to projects that commenced construction before July 1, 2006 and complete construction no later than July 1, 2009. Similarly, Real Property Tax Law Section 421-a formerly provided a similar fifteen-year tax exemption for three-unit multiple dwellings, but Local Law 58 of 2006 of the City of New York, which takes effect on December 28, 2007, will limit such benefits for such multiple dwellings to those projects that receive substantial governmental assistance pursuant to an affordable housing program. This amendment would enable certain one, two, and three-unit newly constructed private homes that are owner-occupied to continue to receive an eight-year tax exemption (two full; six year phase-out). Such private homes must meet the purchase price restrictions and will only be able to avail themselves of the exemption for initial purchasers. In order to ensure that the tax benefit accrues to the homeowner, the benefit period would not begin until the later to occur of the completion of construction or the sale to the initial purchaser. The tax exemption also may be revoked for illegal occupancy and nonresidential use of such private homes. This tax exemption program for owner-occupied one to three family dwelling units will provide an essential economic stimulus to the housing market in New York City.