Establishes a residential-commercial exemption program

BILL NUMBER:S5186B

Title of bill

An act to amend the real property tax law, in relation to establishing a residential-commercial exemption program

Purpose

This bill establishes a residential-commercial exemption.

Summary of provisions

Section 1. The real property tax law is amended by adding a new section 485-n to define residential-commercial exemption program, applicant, benefit area, commercial construction work, commercial purpose or use, commercial use property, mixed-use property, municipality and residential construction work.

This bill would allow any municipality, with the exception of New York City, to opt in, through adoption of a local law, to a real property tax abatement program. This abatement program would be offered in a designated benefit area, as identified by the local governing board, for properties that are converted, created, modernized, rehabilitated, expanded or otherwise improved.

The properties would be exempt from increase in real property taxes and special ad valorem levies for twelve years.

The tax exemption on the changed to assessed value of buildings that have commercial or residential construction work done shall be computed with respect to the exemption base and according to the following schedule:

YEAR OF EXEMPTION PERCENTAGE OF EXEMPTION

1 through 8 100% of exemption base 9 80% of exemption base 10 60% of exemption base 11 40% of exemption base 12 20% of exemption base

Section two states the enactment date.

Justification

This legislation will benefit all Counties, Towns, Villages and School Districts, with the exception of New York City, by allowing them to grant real property tax abatement in defined redevelopment areas.

Tax abatements are a proven technique for local governments to attract investors for revitalization. A tax abatement, which this bill permits, is different than a strict tax exemption. A tax exemption takes away existing revenue generated by a property, while a tax abatement does not change existing tax payments. With tax abatements, governments agree to take less than 100% of new revenue generated through property investment, repair and renovation.

This legislation will provide a tool for local governments to use to improve their communities. The proposed tax abatement program will not impose a cost upon the state, and therefore should be considered by the Legislature as a no-cost, mandate-free way to allow local governments in New York State to invest in and attract outside investment to their communities.

Legislative history

New Bill.

Fiscal implications

None.

Effective date

Effective immediately.