Authorizes the abatement of municipal and school real property taxes in certain cases of catastrophic loss and establishes procedures therefor

6 Co-sponsors

• John J. Bonacic
• Hugh T. Farley
• Martin J. Golden
• Vincent L. Leibell
• Thomas P. Morahan
• Dale M. Volker

Title of bill

An act to amend the real property tax law, in relation to the abatement of taxes in certain cases of catastrophic loss

Purpose

To establish in the Real Property Tax Law a procedure to abate real property taxes for those homeowners that have suffered a catastrophic loss that has made their residence uninhabitable for at least 180 days after such event, such as a fire, flood, gas explosion, or other catastrophic incident.

Summary of provisions

Section 1: Creates a new Title 2-A to the Real Property Tax Law to establish an abatement of taxes in the case of a catastrophic loss. This provision shall only apply to one, two or three family residences that are owner occupied. The home will have to have been rendered totally uninhabitable for at least 180 days after the fire, flood, gas explosion or other event has occurred. The claim for such an abatement must be filed with the municipal assessor within 6 months of the completion of the final assessment role. If such abatement is granted, the taxpayer shall have their real property reappraised to reflect the catastrophic loss and shall pay the reduced tax levy and all penalties and interest shall be waived. The assessors board must issue a decision on the tax abatement within two months after the last day for filing a claim has occurred.

Section 2: Effective date.

Existing law

Under current law, there is no abatement procedure to reduce real property taxes for a home owner that has experienced a catastrophic loss of their home that occurred immediately after the deadline for establishing the town's tax assessments for the year.

Justification

In the Mid-Hudson Valley, there was a family that lost their home due to a gas explosion which resulted in the total loss of their home. In addition to bearing the loss of their home, the family was required to pay their full real property taxes because the gas explosion occurred one month after the close of the assessment books. Under current law, the reasoning for this outcome is that the taxpayer will see a substantial reduction of their taxes in the following tax year when the property is reassessed. However, as in this situation, a new home may be constructed within nine months, which will result in an even higher tax assessment next year. Therefore, at no time will the property owner receive an abatement for their truly tragic loss, and may in the end pay more in real property taxes than they would have if no such catastrophic loss occurred at all.

This bill provides for a procedure so that for six months after the close of the tax assessment rolls, a property owner that has experienced a catastrophic loss can file an application to reduce their tax assessment so that it reflects the true value of the parcel. This bill, if enacted into law, would help to reduce the economic stress experienced by families that have lost their home, their possessions, and perhaps loved ones due to a residential fire, flood, gas explosion or other event that reduced their home to rubble.

Legislative history

S.2948 of 2005/2006, S.420 of 2007/2008

Fiscal implications

None.

Local fiscal implications

Minimal.

Effective date

180 days after it shall have become law.