Volume 2 - Opinions of Counsel SBEA No. 106
Veterans’ exemption (ownership) (husband and wife, both veterans) - Real Property Tax Law, § 458:
Where two veterans have purchased real property as tenants in common or as joint tenants, each using funds eligible for a veterans’ exemption, the total exemption may exceed $5,000. The same result should be true of the situation where a husband and wife, both veterans, own real property as tenants by the entirety although there is a division of authority with respect to this situation.
Our opinion has been requested regarding a situation wherein an assistant county attorney made a decision in October, 1971, that “$5,000 is the limit” on any veteran’s property for tax exemption purposes. It seems that certain real property is jointly owned by a male veteran and a female veteran, each of whom received and used eligible funds in the purchase of such property ($5,000 as to the female and $2,485.80 as to the male), and that an application for an exemption for the total amount of $7,485.80 was rejected by the assessor. The question is whether there are any circumstances wherein the ordinary veterans’ exemption may exceed $5,000 with respect to one parcel of real property. It is not stated whether any portion of the application was granted, nor is it indicated whether the veterans in question were husband and wife.
It is generally accepted that where two veterans have purchased real property as tenants in common or as joint tenants, each using funds eligible for a veterans’ exemption, the total exemption may exceed $5,000 (25 Op.State Compt. 159). In the case of a tenancy in common, the extent of the exemption is the amount of eligible funds used by each veteran, not to exceed their actual interest in the property. In other words, assuming property to be assessed at full value, if Veteran A and Veteran B own real property as tenants in common, and the instrument creating the tenancy vests Veteran A with a two-thirds interest in the property, and Veteran B with a one-third interest in the property, and the property is assessed at $12,000, and each have applied $5,000 in eligible funds toward the purchase of such property, Veteran A could claim exemption in the sum of $5,000, whereas Veteran B would be limited to $4,000 since he only has a one-third interest in the property. It is to be noted that the interest which vests in the owner may not necessarily be in direct proportion to the amount invested by each in the property.
It would also appear to be generally accepted that where two veterans own real property as joint tenants, each is entitled to claim exemption to the extent of eligible funds used by each in the purchase of the property, not to exceed $5,000 as to each veteran, and not to exceed a total of $10,000.
Although there is authority to the contrary (21 Op.State Compt. 340), this office is of the opinion that tenants by the entirety should be treated in the same manner as joint tenants for purposes of determining eligibility for exemption pursuant to section 458 of the Real Property Tax Law.
This issue has never been litigated, and it would appear that until the issue is presented to the courts, this question will remain unsettled.
June 6, 1972