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Volume 2 - Opinions of Counsel SBEA No. 64

Opinions of Counsel index

Aged exemption (local authorization) - Real Property Tax Law, § 467(3)(b):

A county legislative body may not enact a local law which varies the terms of an exemption statute.

Our opinion has been requested as to whether a county legislative body may properly enact a local law to provide that when an otherwise qualified property owner sells his home and purchases another home in any locality within the same county, the period of ownership of both properties will be combined for purposes of computing the five year period of ownership required by section 467 of the Real Property Tax Law, which authorizes a municipality to grant a partial real property tax exemption for certain aged persons.

Section 300 of the Real Property Tax Law provides that all real property within the State shall be subject to real property taxation unless exempt therefrom by law. The words “unless exempt therefrom by law” were used with the intention of limiting the exemption to such as should be enumerated by statutory law (see, City of Rochester v. Coe, 25 App. Div. 300, 49 N.Y.S. 502).

The power of taxation is a function of the sovereign state (New York Constitution, Article XVI, section 1) and no subdivision of the state may exercise it unless a delegation of the power is made in express terms by a proper enabling act. Where the legislature so delegates its taxing power, any taxes imposed by localities must conform to the authorization conferred (United States Steel Corp. v. Gerosa, 7 N.Y.2d 454, 166 N.E.2d 489, 199 N.Y.S.2d 475).

Section 467 of the Real Property Tax Law authorizes any county, city, town, village or school district to enact a local law, ordinance or resolution granting a partial exemption from taxation by said municipal corporation on real property owned by persons sixty-five years of age or over meeting the qualifications enumerated within section 467, which include a length of ownership qualification. Such local law, ordinance or resolution may not vary the terms of the statute authorizing the exemption.

Section 467, subdivision 3(b) provides that no exemption shall be granted unless title to the property has been vested in the owner or all of the owners for at least five years prior to the date of making application for exemption. It should also be noted that the exemption authorized by this section is an optional one. That is, each county, city, town, village or school district must act independently in its own behalf and the exemption applies only to taxes levied by or on behalf of the county, city, town, village or school district granting the exemption. A locality which has granted the exemption may also elect to rescind the exemption in a subsequent year. The apparent legislative intent for the five year ownership requirement is twofold: (1) to prevent transfer of real property made solely to benefit from this exemption statute, and (2) to protect those cities, towns and villages which have granted the exemption from having persons move to such locality solely to benefit from such exemption.

In the administration of this exemption statute several so-called hardship situations have arisen. One such hardship situation concerned the situation where an aged person acquired a dwelling to replace another home he had owned for many years but which was no longer suited to his needs. No exemption could be allowed on the new home because it had not been owned for five years. In 1971, recognizing this hardship situation the New York State Legislature amended section 467 (L. 1971, c. 954) to provide that where an aged person has acquired a dwelling to replace one that is voluntarily sold within one year in the same assessing unit, the periods of ownership of both properties may be combined in computing the required five-year period of ownership. It should be noted that this provision applies only when the new acquisition is within the same assessing unit, which provision is consistent with the legislative intent discussed above.

An assessing unit is defined to mean a city, town, village or a county having a county department of assessment with the power to assess real property (Real Property Tax Law, § 102 (1) ). The only two counties in New York having a county department of assessment are Nassau and Tompkins. All villages and towns in a county are separate assessing units. Therefore, in a county the provisions of the above discussed amendment would apply to transfers within the same village for village purposes, and to transfers within the same town for town, school district and county purposes.

July 21, 1972