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Volume 7 - Opinions of Counsel SBEA No. 47

Opinions of Counsel index

Taxable status date (exemptions generally) (transfer to non-exempt owner - date of transfer); Correction of errors (clerical error) (pro rata tax computation - incorrect date of transfer to non-exempt owner) - Real Property Tax Law, §§ 302, 520, 550:

A mathematical error in the calculation of a tax occurs when, for purposes of determining a pro rata tax liability pursuant to section 520, the assessor erroneously determines the date of the transfer of title to the non-exempt owner.

We have been asked when title is “transferred” for purposes of the proration of taxes upon the transfer of formerly exempt property (Real Property Tax Law, §520) and whether a taxpayer has any remedy for a proration based upon an incorrect determination by the assessor of the date of transfer. The assessor assumes that the date of the deed is the date of transfer, while the property owner claims otherwise.

Section 520 makes previously exempt real property liable to taxation as of the date of “transfer of title” (subd. 2). The date of transfer is the date on which title is conveyed from the seller to the buyer. Delivery of the deed by the grantor and acceptance by the grantee is evidence of the conveyance and accomplishes a transfer of title regardless of when the deed is date or recorded, if at all (Real Property Law, § 244; Mitchell v. Bartlett, 51 N.Y. 447 (1873); Hovey v. Hovey, n.o.r., 170 N.Y.S. 822, (S.Ct., Saratoga Co., 1917), aff’d 183 App.Div. 184, 170 N.Y.S. 226 (3d Dept., 1918)).

Thus, it is the date of the delivery and acceptance of the deed which controls in this matter rather than the date of the deed. Assuming that the new property owner can prove that delivery and acceptance occurred subsequent to the dating of the deed, his property would be liable for the pro rata tax computed from the date of delivery and acceptance.

Subdivision 2 of section 520 provides that after the assessor learns of a transfer of title to previously exempt real property and assesses the property at its value as of the date of transfer, he must notify the new owner of the amount of the assessment and “of the right of that owner to a review of the assessment as provided by title [3] of article [5] of this chapter”. In the present situation, the assessment subject to the pro rata tax liability is to be added to a final assessment roll pursuant to section 553 of the Real Property Tax Law.

Subdivision 3 of section 553 requires the board of assessment review to meet to consider petitions from the assessor to make corrections to final assessment rolls. Paragraph (b) of that subdivision provides that when the board convenes to review these petitions, the board “shall have all of the powers and duties imposed by law on boards of review by section [512] of this chapter and by any other law”. An examination of sections 512 and 1524 of the Real Property Tax Law indicates that the board of assessment review has responsibility for reviewing a complaint that an assessment is illegal, erroneous or unequal. After review, it must determine the final assessment of the real property of each complainant and “such assessment may be the same as or less than the original assessment”. Thus, the jurisdiction of the board of assessment review under sections 512 and 1524 (and, therefore, under section 553(3)(b)) does not extend to questions involving when a transfer of formerly exempt real property occurred.

However, there may be other administrative procedures for review of this issue. It is our opinion that an erroneous determination by the assessor of the date of the transfer, being one element in the determination of a pro rated tax under section 520, would constitute a “clerical error” within the meaning of paragraph (d) of subdivision 2 of section 550 of the so-called Correction of Errors Law. That paragraph defines a clerical error as “an entry which is a mathematical error present in the computation or extension of the tax.” Thus, if a property owner can show that the assessor has incorrectly determined the date of the transfer of property subject to a pro rata tax under section 520, he may seek administrative correction on the tax roll (§ 554) or a refund of any taxes attributable to that incorrect determination (§ 556).

April 16, 1980

NOTE: Revised January, 1982 to incorporate amendment of §1524(2)(c) by Chapter 994 of the Laws of 1981, effective January 1, 1982, barring the board of assessment review from increasing the assessed value of a complainant’s property.