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Volume 3 - Opinions of Counsel SBEA No. 52

Opinions of Counsel index

Aged exemption (ownership requirement) (executory contract of sale) - Real Property Tax Law, § 467:

A person holding an executory contract of sale to a parcel has “ownership” of such real property as required by this section, and is entitled to receive an exemption if he meets the other requirement of the section.

We have received an inquiry as to whether a person holding an unrecorded “land contract” may qualify for the partial exemption authorized by section 467 of the Real Property Tax Law.

We have stated that an otherwise qualified owner in possession of property under an executory contract of sale, who meets the five year ownership requirement of this exemption statute, is entitled to the exemption.

In order to qualify for exemption pursuant to section 467 an otherwise qualified applicant must be the owner of the subject property. The statute does not qualify the nature of ownership. Thus, we have stated that an otherwise eligible person possessing a life estate in real property may qualify for exemption pursuant to section 467 (1 Op.Counsel SBEA No. 34). The law is well settled that a life tenant of real property has a freehold estate and is considered the owner thereof for assessment purposes (Deraismes v. Deraismes, 72 N.Y. 154; In re Detmold’s Estate, 52 Hun 142, 4 N.Y.S. 903, aff’d sub nom. Matter of Babcock et al., 115 N.Y. 450, 22 N.E. 263; In re Kontir’s Estate, 101 N.Y.S.2d 879; Op.Atty.Gen., Aug. 29, 1960; 1915, Op.Atty.Gen. 95).

Likewise, a purchaser in possession under an executory contract of sale (title being retained in the seller notwithstanding) is deemed to be the owner for purposes of taxation (People ex rel. Donner-Union Coke v. Burke, 204 App. Div. 557, 198 N.Y.S. 601, aff’d, 236 N.Y. 650, 142 N.E. 320; Wilson and Company v. City of New York, 73 N.Y.S.2d 206, aff’d, 276 App. Div. 755, 92 N.Y.S.2d 918). On the other hand, it has been held that a seller in possession under an executory contract of sale is deemed to be the owner for taxation purposes (Kissick v. Rees, 111 App. Div. 292, 97 N.Y.S. 692; Cooley on Taxation, 4th Ed. § 602, p. 1274).

The recording of an executory contract is permissive and not mandatory (Real Property Law, § 294).

Therefore, upon filing with him of a copy of the executed contract of sale, an assessor may assess the property to the purchaser and, if all of the other provisions of an exemption statute are satisfied, allow an exemption. The assessor may note either on the assessment roll itself or on the property record card that the purchasers are in possession under an executory contract of sale.

March 20, 1974

NOTE: The period of ownership requirement of section 467 was reduced to two years by L. 1995, c. 409, effective for assessment rolls with taxable status dates occurring on or after January 1, 1975.