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Volume 10 - Opinions of Counsel SBRPS No. 79

Opinions of Counsel index

Exemptions, generally (transfer to non-exempt owner) (Westchester County) - Real Property Tax Law, § 520:

Given the Westchester County fiscal calendar, where a Westchester town board of assessment review acts in November on an assessor’s petition to change the taxable status of recently sold property from exempt to taxable on the current assessment roll and to tax it pro rata from the date of transfer, the board of assessment review’s valuation determination made at such meeting controls for both purposes.

Our opinion has been requested concerning the proper administration of the provisions of section 520 of the Real Property Tax Law in a Westchester County town. Westchester County follows a somewhat unique fiscal calendar with provisions set forth in the Westchester County Administrative Code [WCAC].

The towns and the County follow the generally applicable fiscal year beginning January 1 (Town Law, § 101; County Law, § 352), while school district fiscal years generally begin on July 1 (Education Law, § 2(15)). Westchester County towns have a June 1 taxable status date (WCAC, § 283.141(1)), tentative assessment rolls are filed that same date (WCAC, § 283.121(1)), and final assessment rolls are filed on September 15 (WCAC, § 283.171). {1}  In Westchester, therefore, the school districts levy on the town final assessment rolls prepared in the preceding calendar year, after they have been used for town and county tax purposes.

The facts are that, on July 17, 1998, a nonprofit religious organization (exempt pursuant to RPTL, § 420-a) conveyed title to a non-exempt owner. Prior to the conveyance (i.e., on the 1997 final and 1998 tentative assessment rolls), the property had an assessed value (albeit, exempt from taxation) of some $2.6 million. Following the transfer, the town assessor reassessed the property and determined a taxable assessed value of $1.5 million.

In November 1998, the new owner sought a reduction from the board of assessment review which reduced the value still further: to $1.3 million. As the 1997 assessment roll was never changed, we are asked which figure should be used in computing taxes due given the July 17, 1998 transfer. In our opinion, the $1.3 million value must be used.

Under section 520, when real property receiving an exemption is conveyed to an owner not entitled to exemption, the property “shall be immediately subject to taxation and shall be taxed pro rata for the unexpired portion of any fiscal year during which said transfer of title occurred, and shall be liable in full for taxes in any fiscal year commencing subsequent to the date of transfer . . .” (§ 520(1)). {2}  As we noted in 10 Op.Counsel SBRPS No. 21, “section 520 does not permit assessment roll entries to be made in a haphazard manner; the correction of error provisions of title 3 of Article 5 of the RPTL are utilized (6 Op.Counsel SBEA No. 40).”

First, however, the assessor is to “forthwith assess such property at its value as of the date of transfer” (§ 520(2)). As explained in detail in 10 Op.Counsel SBRPS No. 21, the new owner of the formerly exempt property has administrative and judicial remedies available to review the assessor’s determination. That is precisely what occurred here: the assessor reassessed the property and the owner sought administrative relief of that assessment.

Whether an owner, who is dissatisfied with the assessor’s date of sale reassessment, receives administrative review at the regular “grievance day” hearing of the board of assessment review (RPTL, § 512) or at its so-called “second meeting” conducted for purposes of correcting the final assessment roll (RPTL, § 553(3)(a)) depends on when the assessor commences the section 520 process. Here, on the date of transfer, the 1997 assessment roll had already been converted into a tax roll for town and county tax purposes (by annexation of the warrant to collect 1998 town and county taxes), but was still an assessment roll for purposes of the then as yet to be levied 1998-99 school taxes. Consequently, had the assessor chosen to petition the board of assessment review pursuant to section 553, the final 1997 assessment roll could have been changed so that the parcel would be billed for 1998-99 school taxes when the September 1998 bills were mailed. This though would have necessitated treating the property as omitted (per RPTL, § 551) from the 1998 assessment roll so as to collect the pro rata share of 1998 town and county taxes.

Perhaps for this reason, the assessor did not petition the board of assessment review until November 1998 (i.e., after the 1997-98 school taxes had been billed) to change the property’s status from exempt to taxable on the 1998 assessment roll and to tax it pro rata from the July 17, 1998 date it became taxable. At its second meeting held that month (given the Westchester County fiscal calendars), the board could and did reduce the assessment to be entered on the 1998 final assessment roll (to $1.3 million). In our opinion, that $1.3 million assessment is to be used for purposes of the pro rata taxes due for the unexpired portions of the 1998 town and county and 1998-99 school fiscal years. The same figure must be used on the 1998 assessment roll used for the levy of 1999 town and county and 1999-2000 school taxes. That is, it was the decision of the board of assessment review that gave the assessor the authority to impose the pro rata taxes for the ongoing 1998 town and county and 1998-99 school fiscal years and to change the property’s taxable status for purposes of the 1998 assessment roll (to be used for the next such levies).

The assessor will next have an opportunity to revise the assessment on the June 1, 1999 tentative assessment roll. The property owner will naturally have the concomitant right to administrative and judicial review of that assessment.

March 22, 1999

{1}  In contrast, in most New York State towns, taxable status date is March 1 (RPTL, § 302), tentative assessment rolls are filed May 1 (RPTL, § 506(1)), and final assessment rolls are filed July 1 (RPTL, § 516). School districts generally use these rolls first: to levy their tax on September 1; the towns and counties use them for the following January 1 levy.

{2}  The July 17, 1998 transfer herein therefore occurred approximately six months into the 1998 town and county fiscal year and just after the start of the 1998-99 school fiscal year.