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Volume 8 - Opinions of Counsel SBEA No. 23

Opinions of Counsel index

Aged exemption (income requirement) (sliding scale) - RPTL, § 467-d:

By adopting the provisions of section 467-d, a municipal corporation which has granted the so-called aged exemption pursuant to section 467, may modify its local law, ordinance or resolution to provide a “sliding-scale” exemption for persons whose incomes exceed the local income ceiling.

Section 467-d of the Real Property Tax Law authorizes a graduated scale exemption from real property taxes for certain senior citizen homeowners. Municipal corporations which have opted to grant the 50% senior citizens exemption authorized by RPTL, §467, may amend their local law, ordinance or resolution to adopt a “sliding scale” exemption formula for persons whose incomes are above the locally adopted income ceiling.

Where adopted by a municipal corporation, section 467-d permits senior citizens with incomes exceeding the municipally established maximum income eligibility level by less than $500 to receive an exemption equal to 45% of assessed value, with the percentage of the exemption decreasing by 5% for each $500 increase in income. The minimum exemption is 20% of assessed value for an individual whose income exceeds the local income ceiling by between $2,500 and $2,999; if the local income ceiling is exceeded by $3,000 or more, no exemption may be granted.

In approving this measure in 1983 (L.1983, c.991), former Governor Cuomo stated in part that:

Under current law, municipalities are authorized to grant to persons 65 years of age or older real property tax exemptions equivalent to 50% of the assessed valuation to the person’s home if the person’s annual income does not exceed a maximum limit. That limit is set by the municipality and may range from $3,000 to $10,500 per year.

A major problem with the current law is that if the person’s income exceeds the limit by only a few dollars, the entire exemption is lost. This bill will remedy this problem by providing a graduated scale formula for determining the eligibility and rate of exemption for persons whose incomes are above the maximum income ceiling.

I believe that this bill serves a salutary purpose and should be approved. It creates an option for local governments that think it is appropriate, but is not a mandate for those who prefer not to follow its authorization.

By way of example, if a municipality adopted an $8,000 ceiling under section 467, that municipality could provide a sliding scale rate of exemption for amounts between $8,000 and $11,000. An income up to $8,499 would qualify for a 45 percent exemption of the assessed value of the property; between $8,500 and $8,999, a 40 percent exemption; and so on, to a minimum of 20 percent exemption of the property’s assessed value for a person whose income is between $10,500 and $10,999.

The new sliding scale exemption is available to school districts because the decision on whether or not to adopt it is to be made by each municipal corporation including school districts. Therefore, the school district is not compelled to adopt the exemption if the county, city, town, or village do so, and is not prevented from adopting it if the others choose not to.

December 5, 1983