What's happening
This bill limits property tax exemptions for certain nonprofit-owned land without buildings to a maximum of seven years after acquisition.
Why it matters
Encourages faster development of nonprofit-owned land. By imposing a seven-year limit on property tax exemptions for unimproved land, the bill pressures nonprofits to start construction or improvements sooner, potentially accelerating community benefits or economic activity.
Limits indefinite tax-exempt land banking. Nonprofits can no longer hold onto vacant land indefinitely without paying property taxes, which addresses concerns that such properties reduce the local tax base and shift the burden to other taxpayers.
Creates clear timelines for both existing and future acquisitions. For land already owned, the seven-year clock starts with the law’s effective date, while for newly acquired land, the countdown begins at acquisition—ensuring all affected properties follow a consistent, predictable schedule.
May influence nonprofit land acquisition strategies. Organizations may become more selective or strategic about acquiring land, knowing that tax-exempt status for unimproved properties is now time-limited, which could impact long-term planning and project development.
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Who cares
Headline styles
Limit Tax Breaks for Nonprofits
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to local government
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit Nonprofit Tax Exemptions
In Assembly Committee · Real Property Taxation · Sponsor Aileen Gunther
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3298
2017-2018 Regular Sessions
IN SENATE
January 20, 2017
Introduced by Sens. LARKIN, LATIMER -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the real property tax law, in relation to the duration of the exemption for property of mandatory class nonprofit organizations by reason of the absence of suitable buildings or improvements thereon if construction of such buildings or improvements is in progress or is in good faith contemplated
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 3 of section 420-a of the real property tax law, such section as renumbered by chapter 919 of the laws of 1981, is amended to read as follows:
3. Such real property from which no revenue is derived shall be exempt though not in actual use therefor by reason of the absence of suitable buildings or other physical improvements thereon if:
(a) the construction of such buildings or other physical improvements is in progress or is in good faith contemplated by such corporation or association within seven years after such property has been acquired by such corporation or association; for the purposes of calculating such seven years' period, with respect to property acquired before the effective date of the chapter of the laws of two thousand seventeen which amended this subdivision, such seven years' period shall commence on such effective date, and with respect to property acquired on or after such effective date, such seven years' period shall commence on the date of acquisition; or
(b) such real property is held by such corporation or association upon condition that the title thereto shall revert in case any building not intended and suitable for one or more such purposes shall be erected upon such premises or some part thereof.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02699-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to the duration of the exemption for property of mandatory class nonprofit organizations by reason of the absence of suitable buildings or improvements thereon if construction of such buildings or improvements is in progress or is in good faith contemplated
Purpose
To establish stricter standards for non-profit organizations that purchase land and file an application for municipal real property exemption. The purpose of this bill is to ensure that properties exempt from real property taxes are being used in a manner that supports the specific exemption granted.
Summary of provisions
Section 1: Amends Real Property Law section 420-a (3) to permit a non-profit organizations that purchase real property that is on the tax rolls to obtain a real property exemption if such organization within 7 years after such property is acquired constructs buildings or other capital improvements or is in good faith contemplating such construction to further its charitable purposes.
Existing law
Under current law, if a non-profit organization purchases property that is on the tax rolls, such organization can obtain an exemption from real property taxes if the construction of buildings or other improvements are in progress or are in "good faith" contemplated. This bill tightens qualifications for obtaining tax exempt status by requiring that buildings or improvements must be constructed to further the organization's charitable purpose within 7 years of purchasing such property.
Justification
Under current law, non-profit charitable organizations can purchase land as an investment vehicle and then obtain the real property's tax exempt status (to the detriment of the local taxing authority) without realistically contemplating the satisfaction of the requirement that the property is used in the furtherance of the organizations' charitable mission. This bill amends the law so that only properties that are truly acquired to further an organization's charitable purpose are granted tax exempt status. If 7 years after the acquisition of the parcel, the charitable organization has not commenced activities to further the charitable purpose, then such land will be placed back on the tax rolls.
Legislative history
2015-2016:S.2258-A Referred to Local Governments 2013-2014: S.3993-A Referred to Local Governments/A1711-A Referred to Real Property Taxation 2011-2012: A499 Held in Real Property Taxation 2009-2010: A981 Referred to Real Property Taxation/S670 Referred to Local Government 2007-2008: A1259 Referred to Real Property Taxation/S529 Referred to Local Government 2005-2006: A9020 Referred to Real Property Taxation/S4714 Referred to Local Government
Fiscal implications
None. LOCAL FISCAL IMPLICATIONS :
Would place certain parcels back on the tax rolls that were in fact not used for a bona fide exempt use.
Effective date
January 1st of the year next succeeding the date on which it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.