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Volume 4 - Opinions of Counsel SBEA No. 82

Opinions of Counsel index

Aged exemption (income requirement) (net rental income less than “fair rental value”) - Real Property Tax Law, § 467:

For purposes of the income requirement of Real Property Tax Law, section 467, an applicant’s actual net rental income received must be included, despite the fact that such amount is less than the “fair rental value” of the property.

We have received an inquiry requesting our opinion as to rental income in reference to the partial real property tax exemption authorized for aged persons by section 467 of the Real Property Tax Law. The inquiry concerns the income to be ascribed to an apartment rented by an aged couple to a near relative for a sum which appears to be less than the “fair rental value”.

Subdivision 3(a) of section 467 provides that no exemption may be allowed where the income of the owner or owners (and spouse) of the property exceeds a sum to be set at any figure between $3,000 and $6,500 by the locality granting the exemption. This subdivision further provides that income shall include social security and retirement benefits, interest, dividends, net rental income, salary or earnings, net income from self-employment, but does not include gifts and inheritances.

The statute clearly requires an applicant to report actual net rental income. A definition of net rental income for purposes of section 467 is contained in a prior opinion of this office (1 Op.Counsel SBEA No. 8) . The statute does not provide for another standard and in the absence of authority to the contrary, it would appear that an assessor is precluded from employing another standard.

In applying for this exemption an applicant should submit proof of income and in the absence of reasonable satisfactory documentation may be found ineligible. If a Federal or New York State income tax return was filed by any of the owners of the property or their spouses for the preceding calendar year, a copy of such return should be submitted with the application. In addition, the owners may be required to submit statements of rent receipts or other documents to substantiate the statement of income set forth in the application.

February 5, 1975