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Volume 6 - Opinions of Counsel SBEA No. 75

Opinions of Counsel index

Farm structures and buildings exemption (agricultural use) (horse breeding) (fences) - Real Property Tax Law, § 483:

New and renovated barns and fences essential to the operation of lands used for the breeding of horses may receive the exemption authorized by section 483 of the Real Property Tax Law.

Our opinion has been requested concerning the eligibility of fences and a renovated barn for the partial exemption from taxation granted by section 483 of the Real Property Tax Law for certain farm structures and buildings. The inquiry involves a horse breeding farm.

Section 483 provides for a ten-year tax exemption on newly constructed or reconstructed buildings or structures essential to the operation of certain agricultural and horticultural lands where the improvements are completed after January 1, 1969 and before January 1, 1989. This is a partial exemption from taxation to the extent of any increase in value resulting from qualified construction or reconstruction. The land, consisting of at least five acres, must have been actively devoted to a bona fide agricultural or horticultural Operation carried on for profit for a period of not less than two consecutive years prior to the date of application.

Section 483, subdivision 3, provides that the terms “structures and buildings” includes “structures and buildings or portions thereof used directly and exclusively in the raising and production for sale of agricultural and horticultural commodities or necessary for the storage thereof, but not structures and buildings or portions thereof used for the processing of agricultural and horticultural commodities, or the retail merchandising of such commodities.”

Of special relevance to this inquiry is an amendment to section 483 enacted in 1977 (L.1977, c.267). Prior to this amendment, we had concluded that section 483 had no application to a commercial horse breeding operation (1 Op.Counsel SBEA No. 17). The 1977 amendment, effective June 14, 1977, added a new subdivision 9 which provides that agricultural and horticultural uses include “the activity of raising and breeding horses.” Since taxable status date for most towns is May 1 annually, the initial town assessment roll to which this amendment had application was the town assessment roll prepared following taxable status date, May 1, 1978. Thus, commencing with town assessment rolls prepared in 1978, and in subsequent years, newly constructed or reconstructed structures essential to the operation of an otherwise qualified horse breeding facility (e.g., a renovated barn) were eligible for exempt status as authorized by section 483.

A similar conclusion may be reached with respect to a newly constructed or reconstructed fence. For purposes of assessment and taxation Real Property Tax Law, section 102, subdivision 12(b), defines “real property” to mean and include “[b]uildings and other articles and structures, substructures and superstructures erected upon, under or above the land, or affixed thereto.” If a structure or article is to be considered real property and therefore liable for taxes, it must be determined that the item is annexed to the realty, adapted to the use or purpose of the realty with which it is connected and that there is an intent that it remain a part of the realty while it is so utilized (see, 5 Op.Counsel SBEA No. 27). Of relevance here is our previous conclusion that vineyard trellises are real property and may be considered for exempt status under section 483 (3 Op.Counsel SBEA No. 19). It would also follow that a newly constructed or reconstructed fence which is essential to the operation of agricultural or horticultural lands, as provided by section 483, which includes lands used for the activity of raising and breeding horses, may be considered for exempt status pursuant to section 483.

May 18, 1979