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Volume 8 - Opinions of Counsel SBEA No. 104

Opinions of Counsel index

Municipal corporations exemption (property acquired by tax deed) (notice to assessor) - Real Property Tax Law, §§ 406, 500; 9 NYCRR 190-1.2:

The right of a municipal corporation to an exemption from taxation on property acquired for nonpayment of taxes is not contingent upon formal notice of the acquisition being received by the assessor.

Pursuant to section 406(5) of the Real Property Tax Law (RPTL), real property acquired by a municipality for delinquent taxes is deemed to be held for a public use and therefore exempt from real property taxes and special ad valorem levies for three years from the date of the deed, unless the municipality is receiving revenue from the property as of taxable status date. Such properties are liable for school taxes and special assessments during this time. Section 406(5) provides no further requirements for the exemption. Accepted rules of statutory construction provide that tax exemption statutes cannot be construed to include requirements where none clearly exist (Erie County Agricultural Society v. Cluchey, 40 N.Y.2d 194, 352 N.E.2d 552, 386 N.Y.S.2d 366 (1976)). Therefore, if a county (or any other tax enforcing jurisdiction) has acquired properties by virtue of non-payment of taxes and is not using them to generate revenue as of taxable status date, it is entitled as a matter of law to exemptions from real property taxes (other than school levies) and special ad valorem levies as of the date of the deed.

A tax deed conveys an estate or interest in real property subject to the recording act (see, Doyle v. Lozzaro, 33 A.D.2d 142, 306 N.Y.S.2d 268 [3d Dept. 1970], aff’d, 33 N.Y.2d 981, 309 N.E.2d 138, 353 N.Y.S.2d 740 (1974)). Therefore, when the tax deed is offered for recording, the holder should also file a real property transfer report (Form EA-5217). In this way, assessors should be notified that title has passed by receipt of a copy of the form filed with the county clerk.

The assessor, however, has an affirmative duty to take inventory of all the real property located within the assessing unit, including the names of owners, for purposes of completion of the tentative roll (RPTL, §§ 500(1), 1402(1); 9 NYCRR 190-1.2). Where an assessor is satisfied that title to a parcel has passed, we have concluded that he may enter the name of the new owner on the assessment roll without waiting for formal notification (5 Op. Counsel SBEA No. 48; see, 6 id., No. 36). Therefore, if the assessor is satisfied that the county has taken tax title to certain parcels as of taxable status date, he should list the county as the owner of the properties on the assessment roll and, presuming those properties are not generating revenue for the county as of taxable status date, grant the exemption provided by section 406(5).

March 7, 1986