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Volume 10 - Opinions of Counsel SBRPS No. 67

Opinions of Counsel index

School tax relief [STAR] exemption (residence requirement) (residential improvement split by municipal boundary line) - Real Property Tax Law, § 425:

Where a residential improvement otherwise eligible for a STAR exemption is split by a municipal boundary line, the STAR exemption should be pro-rated in the same manner as the full value of the property is apportioned to each municipality by the respective assessors.

Our opinion has been requested concerning the applicability of the school tax relief [STAR] exemption (Real Property Tax Law, § 425) to real property which straddles the boundary line between a city and a town. It appears that most of the residential improvement is located in the town, although the land area is divided roughly evenly between the town and the city. The assessment of the property appears on the respective assessment rolls as follows:

Assessment of property
Land ValueTotal Value
Town $10,300 $73,000 {1}
City $ 6,300 $20,000

Although, practically speaking, the applicants have but a single “residence,” appropriately, the respective portions of the property in the town and the city are separately assessed. While this property may be a single entity for conveyance, recording and other purposes, it may not be assessed as a single parcel for assessment purposes, because it extends into two assessing units (RPTL, § 102(11); see also, 9 NYCRR 189.1(i)). In other words, where, as here, an otherwise contiguous land area under single ownership is geographically divided by a municipal boundary, that land area must be separately described as two tax map “lots” and separately assessed as such in the two adjoining municipalities.

According to the facts as presented, the applicants have been receiving a senior citizens exemption (RPTL, § 467) from both the town and the city, since the house is located in both jurisdictions. Under RPTL, section 425(6)(c), if real property is eligible for the senior citizens exemption, “it shall also be deemed to be eligible for the enhanced [STAR] exemption . . ., and no separate application need be filed therefor.” Thus, under a literal reading of the STAR exemption statute, the applicants would initially appear to be entitled to the enhanced STAR exemption in both jurisdictions. However, since the enhanced STAR exemption is a “fixed dollar” exemption of $50,000, giving the applicants two full enhanced STAR exemptions would result in them getting a disproportionate tax reduction under the STAR program. {2}  Indeed, if we followed this approach, the enhanced STAR exemption could potentially be worth as much as $100,000 to persons with “split” residences. {3} 

It is an accepted rule of statutory construction that all parts of a statute must be harmonized with each other and with the general intent of the whole statute (McKinney’s Cons. Laws of N.Y. Annot., Book I, Statutes, § 98 (1971)). This principle has been applied in the interpretation of various statutes, including the RPTL (see, e.g., Honeoye Cent. Sch. Dist. v. Berle, 72 A.D. 2d 25, 423 N.Y.S. 2d 336 (4th Dept. 1979)).

Applying this principle to sections 425 and 467 of the RPTL, so as to read these statutes as harmonious, we believe that the “deemed to be eligible” language of section 425, noted above, must be read in conjunction with the implied restriction that the value of any STAR exemption cannot exceed an equalized $50,000. To effectuate this reading, the STAR exemptions should be pro-rated in the same manner as the full value of the property was apportioned to each municipality by the respective assessors. So, here for example, if 78.5 percent of the full value of the property is in the town and the remaining 21.5 percent is in the city, {4} the applicants would be entitled to an enhanced STAR exemption of $39,250 (i.e., 78.5% of $50,000) in the town, and an enhanced STAR exemption of $10,750 in the city (21.5% of $50,000).

We recognize that this procedure may require some cooperation between assessors, but we understand that such cooperation is customary when properties which cross municipal boundaries are assessed. Be that as it may, we believe our interpretation is most in keeping with the intent of the applicable statutes, and will be fair and equitable to property owners throughout New York State.

July 30, 1998

{1}  The stated uniform percentage of value is 100 percent in both the city and the town.

{2}  Although the applicants are receiving senior citizens exemptions on both portions of their residence, this is not a cause of concern because section 467 is a percentage-based (e.g., 50%) exemption, rather than a fixed-dollar exemption.

{3}  Here, if two exemptions were permitted, they would total $70,000 because the value of the city portion of the property is only $20,000.

{4}  If one applies the assessors’ stated uniform percentage of value - 100 in each case (see Endnote 1) - since the town and city portions have been assessed at $73,000 and $20,000 respectively, the town portion would represent 78.5% of the total of $93,000, and the city portion would represent 21.5% of the total. If the two jurisdictions did not assess at the same stated percentage of value, an equalization adjustment would be necessary to fairly apportion the exemption.