Provides for the granting of real property tax abatements due to catastrophic loss caused by a natural disaster

Summary of provisions

Section 1: Creates a new Title 2-A to the Real Property Tax Law to establish an abatement of real property taxes in the case of a catastrophic loss to a one, two or three family residence, that is owner occupied, that is caused by a declared natural disaster. This provision shall only apply to one, two or three family residences that are owner occupied that are totally destroyed or in which one or more of the units of such residence have been extensively damaged. The home, or at least one unit within the residence, will have had to have been rendered totally uninhabitable for at least 90 days after the declared natural disaster has occurred and cannot be reasonably made fit for habitation within the 90 day period of time after the natural disaster. In addition, the damage to such residential property must have occurred within 9 months after the close of the final municipal real property assessment roll.

The claim for such an abatement must be filed with the municipal assessor within 11 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.

The bill adds a new section 548-d to require New York State to reimburse the local government for the real property tax lost due for persons who apply for a real property talc abatement pursuant to this provision. The reason being, that the local municipality in which the natural disaster has occurred is also, most probably, financially stressed due to the natural disaster that occurred within its jurisdiction. This provision ensures that such local government will continue to have the tax revenue that it planned to spend for that fiscal year.

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 municipal real property tax roll assessments for the next fiscal year. Such real property tax rolls close in March of every year.

Justification

Recently, many homeowners in New York State either lost their homes or such homes were made inhabitable for more than 90 days due to Super-storm Sandy. In addition to bearing the loss of their home, these families have been required to pay their full real property taxes because the damage due to Super storm Sandy occurred six months after the close of the real property assessments for that taxable year. 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 downward to reflect the reduced value of such residence. However, some of these residence may be rehabilitated or a new home constructed on the site before the next year's tax rolls are closed, 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 they may in the end pay more in real property taxes than they would have if no such catastrophic loss occurred at all. Families in this situation, after the event, face a cash crunch of having no place to live, mounting debts, and other emotional stress. At least, these families should have the ability to petition their local government to reduce real property taxes to reflect the true diminished value of their home.

This bill provides for a procedure so that for eleven 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 natural disaster that has reduced their home to rubble.

Legislative history

New Bill.

Fiscal implications

To be determined.

Local fiscal implications

Minimal.

Effective date

This act shall take effect retroactively to January 1, 2013.