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Volume 10 - Opinions of Counsel SBRPS No. 56

Opinions of Counsel index

Nonprofit organizations exemption (religious) (unincorporated church); Officers of religious denominations exemption (scope) (residence of clergyman); Religious corporations exemption (scope) (unincorporated church) - Real Property Tax Law, §§ 420-a, 436, 462:

The residence of the officiating clergyman of an unincorporated church is not entitled to receive an exemption pursuant to section 462 of the Real Property Tax Law.

We have been asked if an unincorporated church may receive a tax exemption on the residence of its officiating clergyman (Real Property Tax Law, § 462). A response requires analysis of three sections of the RPTL.

Section 420-a

Section 420-a provides an exemption to “a corporation or association organized or conducted exclusively for religious . . . purposes [provided the property is] used exclusively for carrying out thereupon . . . such purposes” (RPTL, § 420-a(1)). In construing this section, in Mohonk Trust v. Board of Assessors, 47 N.Y.2d 476, 392 N.E.2d 876, 418 N.Y.S.2d 763 (1979), the State’s highest court held that:

Whatever the meaning of the term “corporation or association” in another context, the phrase has long been understood in tax exemption statutes of this sort (see, e.g., L.1896, ch.908) simply to indicate that the particular organization granted the exemption need not be incorporated. Although the word “corporation” is strictly defined in the law, the word “association” is a broad term which may be used to include a wide assortment of differing organizational structures including trusts, depending on the context (47 N.Y.2d at 482-83, 418 N.Y.S.2d at 766).

Consequently, incorporation is not a prerequisite for exemption pursuant to section 420-a. However, as discussed below, an ownership issue remains to be addressed.

Section 436

If a church is not incorporated, it cannot own property in the name of the church (6A NY Jur 2d, Associations and Clubs, § 10; 92 NY Jur 2d, Religious Corporations, § 75; see, Lougheed v. Dykeman’s Baptist Church, 129 N.Y. 211, 29 N.E. 249 (1891); Baxter v. McDonnell, 155 N.Y. 83, 49 N.E. 667 (1898); Mount v. Tuttle, 183 N.Y. 358, 76 N.E. 873 (1906)). It is possible, however, for an exemption to be granted to certain association property if it is held in trust.

That is, section 436(1) of the RPTL provides, in part: “Real property held in trust by a clergyman or minister of a religious denomination for the benefit of the members of his or her incorporated church or unincorporated church shall be entitled to the same exemption from taxation, special ad valorem levies and special assessments as authorized by section [420-a] of this article. . . .” Prior to its amendment (L.1978, c.738), that section provided that “property held [in trust] by an officer of a denomination shall be entitled to the same exemption . . . as property owned by a religious corporation.” The constitutionality of the 1978 amendment was upheld in Town of Hardenburgh, Ulster Co. v. State of New York, 52 N.Y.2d 536, 421 N.E.2d 795, 439 N.Y.S.2d 303 (1981), app. dsmd., 454 U.S. 958, 102 S.Ct. 496, 70 L.Ed.2d 374 (1981). For our purposes here, it is sufficient to note that, before its 1978 amendment, section 436 referenced exemptions for religious corporations, while since its amendment, it has specifically referenced section 420-a.

Section 462

While section 420-a provides churches with an exemption on property they use for religious purposes, residential use is not generally a religious use. Therefore, section 462 provides, in part, “In addition to the exemption provided in [RPTL, § 420-a] of this article, property owned by a religious corporation while actually used by the officiating clergyman thereof for residential purposes shall be exempt from taxation” (emphasis added). {1}  The Court of Appeals had occasion to analyze this statute, and its statutory history, in Congregation Kollel Horabonim, Inc. v. Williams, 48 N.Y.2d 301, 398 N.E.2d 515, 422 N.Y.S.2d 909 (1979). In that case, the Court held that a religious corporation could receive an exemption on its clergyman’s residence even though it did not own its own house of worship. For our purposes, it is noteworthy that the Court traced section 462 to chapter 565 of the Laws of 1892 which provided a partial exemption {2} from taxation to the “dwelling-house owned by any religious corporation. . . .”


If the provisions of section 436 are satisfied, property held in trust by the clergyman or minister of an unincorporated church which is used exclusively for religious purposes may receive a tax exemption. As to the residence of the church’s clergyman, however, given the plain language of section 462, the specific reference to section 420-a within section 436, and the Court of Appeals’ reference in Mohonk, (supra), to the “strict” meaning of “corporation,” in our opinion, an unincorporated church cannot receive an exemption pursuant to section 462.

April 16, 1998

{1}  The distinction between section 420-a (which provides an exemption from taxation and most special ad valorem levies and special assessments) and section 462 (which exempts only taxation) has been recognized judicially (St. Agnes Church v. Daby, 148 A.D.2d 31, 543 N.Y.S.2d 208 (3d Dept., 1989); Hapletah v. Assessor of the Town of Fallsburg, 79 N.Y.2d 244, 590 N.E.2d 1182, 582 N.Y.S.2d 54 (1992)).

{2}  The exemption was extended to the entire value of the residence in 1959 (c.733).