Relates to a property investment exemption in certain villages

Summary of provisions

Section 1 adds a new section 485-q to the real property tax law that would allow villages with a population of not less than 5,000 and not more than 6,000 in counties with a population of not less than 290,000 and not more than 300,000 to grant a property investment exemption to real property that was constructed, altered, installed, or improved subsequent to July 1, 2013 for the purpose multi-family residential, mixed use, commercial, business or industrial activity. These proper- ties would be exempt from taxation and special ad valorem levies, except for special ad valorem levies for fire district, fire protection district and fire alarm district purposes as provided in this section.

Such real property would be exempt for a period of one year to the extent of 60% of the increase in assessed value attributable to such construction, alteration, installation or improvement and for a period of 9 years where the percentage of the exemption would decrease by no less than 5% each year during the additional period of 9 years. Exemption shall be computed with respect to the "exemption base." Exemption base shall be increase in assessed value as determined in initial year of such ten year period following the filing of original application.

Cost of such construction, alteration, installation or improvement must exceed the sum of $10,000 or such greater amount as may be specified in local law or resolution. Does not include ordinary maintenance or repairs.

No such exemption shall be granted concurrently with or subsequent to any other real property tax exemption granted to the same improvement, except where during period of previous exemption, payments in lieu of taxes or other payments were made to the local government in an amount that would have been equal to or greater than the amount of real proper- ty taxes that would have been paid on such improvements in relation to this proposed section.

Such exemption shall only be granted upon application by the owner of such real property on a form prescribed by the state board. Application must be filed with appropriate local assessor or Treasurer. Assessor or Treasurer can approve the application for tax exemption.

Provides definitions for mixed use property.

Allows municipalities to raise or reduce percentage of exemption; provided, however, that a project in course of construction and that has existing exemptions prior to passage of any local law or resolution changing exemption, shall not be subject any such reduction.

Allows municipalities to establish by resolution a date for the commencement of effectiveness of exemptions.

Allows municipalities to establish an Industrial and Commercial Incen- tive Board that would be responsible for coordinating local plan for business real property and making recommendations concerning how to use tax exemptions. Outlines structure and responsibilities of the Indus- trial and Commercial Incentive Board.

Section 2 sets an immediate effective date

Justification

New York State has a variety of tax exemptions meant to give municipalities the ability to grant real property tax exemptions for multi-family residential, mixed use, commercial, business or indus- trial purposes. There are many areas of real property tax law that currently allow cities, towns, and villages to provide real property tax exemptions. Section 421-c exempts certain new multiple dwellings from local taxation in relation to affordable housing in cities, towns, and villages of less than 1 million. Section 421-f provides an exemption of capital improvements to residential buildings. Section 488-a allows for the rehabilitation of certain class B multiple dwellings and class A multiple dwellings used for single room occupancy and Section 489 allows for an exemption from taxation of alterations and improvements to multi- ple dwellings to eliminate fire and health hazards.

New York State has recognized that appropriate tax exemptions offer municipalities the flexibility to allow local property owners opportu- nity to improve the quality of their property and community without having the anxiety of being punished with higher property taxes in the short-term. With high property taxes, it is vital that New York State continues to empower municipalities to take positive steps to create jobs, grow their economies, and improve their tax base.

This new section 485-q adds to over a dozen other Real Property Tax Exemptions that currently allow municipalities in New York State these types of incentives to property owners. It specifically recognizes that more villages in New York State should be able to take control of their economic future by creating effective public-private partnerships that build new businesses and create more economic opportunity for their residents. This legislation is in line with this principle.

Legislative history

This is a new bill

Local fiscal implications

Allows local municipalities to offer tax exemptions which would exempt only the increased value in assessment related to improvements. Has no impact on current revenues. Would likely

raise other forms of local and state revenue related to increased economic activity.

Effective date

This act shall take effect immediately.