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Volume 5 - Opinions of Counsel SBEA No. 124

Opinions of Counsel index

Clergymen’s exemption (scope and computation) (principal occupation) - Real Property Tax Law, § 460:

Section 460 of the Real Property Tax Law provides a partial real property tax exemption to real property owned by a person, whose principal occupation is, and whose time is devoted to, the performance of the duties of a clergyman.

Our opinion has been requested concerning the eligibility for exemption of real property belonging to a married couple where there is a claim that the property is being used for a religious purpose. A determination of the taxable status of the real property in question requires an examination of several sections of the Real Property Tax Law.

Section 421 (i.e. 420) of the Real Property Tax Law directs that “real property owned by a corporation . . . organized exclusively for . . . religious . . . purposes . . . and used exclusively for carrying out thereon one or more of such purposes . . . shall be exempt from taxation.” In this case, however, it is indicated that the real property is owned by two individuals. Consequently, no exemption can be granted pursuant to section 421.

Section 462 of the Real Property Tax Law provides that real property owned by a religious corporation while actually used by the officiating clergyman of such religious corporation for residential purposes shall be exempt from taxation. Again, in the situation presented, the real property is not owned by a religious corporation. Consequently, no exemption is available pursuant to this section.

Section 436 of the Real Property Tax Law provides that real property held by any officer of a religious denomination is entitled to the same exemption from taxation, special ad valorem levies and special assessments, subject to the same conditions and exceptions, as property owned by religious corporations. It is to be noted that section 436 provides that the property must be held by an officer of a religious denomination, which means that such property must be held by such officer in a fiduciary capacity, such as a trustee, as distinguished from, and in opposition to, individual or private ownership of such property. To qualify for this exemption, it must be shown that the property is being held by such officer for the exclusive use and benefit of the religious denomination. The facts presented herein indicate private (fee simple) ownership, therefore section 436 is also eliminated from consideration.

Section 460 of the Real Property Tax Law provides in relevant part as follows:

Real property owned by a minister of the gospel . . . of any denomination, an actual resident and inhabitant of this state, who is engaged in the work assigned by the church or denomination of which he or she is a member . . . shall be exempt from taxation to the extent of fifteen hundred dollars.

The exemption applies to real property owned by a person whose principal occupation is, and whose time is devoted to, the performance of the duties of a clergyman. Both the Attorney General and this office have held in various opinions (see, e.g., 1914, Op.Atty.Gen. 36), that part-time religious work on the part of individuals whose primary occupation is not religious, will not qualify real property owned by such individuals for the partial exemption under section 460. Thus, when a clergyman also engages in a secular occupation or employment, it becomes a question of fact of whether the clergyman is engaged in the performance of his duties as such, or whether in fact he is engaged in the pursuit of a nonreligious occupation and his duties as a clergyman are merely secondary or of a part-time nature. While the taking of a secular employment does not of itself deprive a clergyman of the exemption, the fact to be resolved is whether in such a situation it can still be said that the clergyman is “engaged in the work assigned to him by the church or denomination of which he is a member.”

Accordingly, it is a question of fact in each case, to be determined by the local assessor, whether the exemption allowable pursuant to section 460 of the Real Property Tax Law may be granted to a clergyman who has taken nonreligious employment in order to supplement his income. If the assessor is satisfied that the clergyman’s primary activity is his ministry and that he is only engaged in secular employment to obtain supplemental income for the support of himself and his family, it would appear that he would be justified in granting this exemption. If, however, the minister is not in fact actively engaged in his ministry, the exemption should not be granted.

It was stated in this inquiry that the property is jointly owned by a married couple. If it is determined that the clergyman in this inquiry meets the qualifications of section 460, the fact that he is not the sole owner of the property will not disqualify him from eligibility for exemption.

The amount of the exemption allowable depends upon whether the parties own the property as tenants in common or as joint tenants. If a clergyman and a non-clergyman hold as tenants in common (an estate held in joint possession by two or more persons at the same time by several and distinct titles), the exemption would be determined as to the separate interest of the clergyman and would be limited to the value of such interest, not to exceed the statutory limitation of $1,500. Thus, if the clergyman and the non-clergyman each own an equal interest as tenants in common, the exemption would apply to 50 percent of the assessment of the property representing the separate interest of the clergyman which cannot exceed the statutory maximum limitation of $1,500.

However, if the parties own as joint tenants, the exemption could not be limited to a partial interest in the property since under a joint tenancy, each of the parties has an identical undivided interest in the property. Upon the death of one party or joint tenant, his share goes to the survivor or survivors. Thus, if the parties herein own as joint tenants (or tenants by the entirety), the exemption should be computed on the basis of the value of the entire property (see also, 4 Op.Counsel SBEA No. 65).

November 10, 1976

NOTE: Section 436, referred to above, has been amended (L.1978, c.738) so as to clarify the trust relationship discussed above.