Establishes an exemption from local taxation in cities having a population of one million or more for newly constructed housing with 3 or less dwelling units.
TITLE OF BILL: An act to amend the real property tax law, in relation to exemption of newly constructed private homes from local taxation in cities with a population of one million or more
PURPOSE: This bill would provide a tax exemption for new multiple dwellings with three or fewer units to further incentivize the construction of new housing.
SUMMARY OF PROVISIONS: This bill would add a new section 421-1 to the Real Property Tax Law that would exempt newly constructed private homes containing not more than three dwelling units in cities with a population of one million or more from all local and municipal taxes, other than assessments for local improvements. For private homes containing less than four dwelling units, there would be two years of one hundred percent exemption followed by a six year phase-out. Such projects would continue to pay taxes on the value of the land appearing on the assessment roll in the first year after completion of construction. The maximum exemption amount, which is based on purchase price, for a home containing one dwelling unit is $671,000, a home containing two dwelling units is $755,540, or a home containing three dwelling units is $914,750.
JUSTIFICATION: Real Property Tax Law section 421-b formerly provided a similar eight-year tax exemption for certain one- and two-unit multiple dwellings, but that exemption is only available to projects that commenced construction before July 1, 2006 and complete construction no later than July 1, 2010. Similarly, Real Property Tax Law Section 421-a formerly provided a similar fifteen-year tax exemption for three-unit multiple dwellings, but Local Law 58 of 2006 of the city of New York, which took effect on December 28, 2007, limits such benefits for such multiple dwellings to those projects that receive substantial governmental assistance pursuant to an affordable housing program. This amendment would enable certain one-, two-, and three-unit newly constructed private homes that are owner-occupied to continue to receive an eight-year tax exemption (two year full; six year phase-out). Such private homes must meet the purchase price restrictions and will only be able to avail themselves of the exemption for initial purchasers. In order to ensure that the tax benefit accrues to the homeowner, the benefit period would not begin until the later to occur of the completion of construction or the sale to the initial purchaser. The tax exemption also may be revoked for illegal occupancy and nonresidential use of such private homes. This tax exemption program for owner-occupied one- to three-family dwelling units will provide an essential economic stimulus to the housing market in New York City.
LEGISLATIVE HISTORY: New Bill.
FISCAL IMPLICATIONS: None to state.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 4381 2011-2012 Regular Sessions IN SENATE April 1, 2011 ___________Introduced by Sens. YOUNG, LANZA, SAVINO -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the real property tax law, in relation to exemption of newly constructed private homes from local taxation in cities with a population of one million or more THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property tax law is amended by adding a new section 421-1 to read as follows: S 421-1. EXEMPTION OF CERTAIN PRIVATE HOMES FROM LOCAL TAXATION. 1. FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW- ING MEANINGS: (A) "COMMENCE CONSTRUCTION" SHALL MEAN THAT THE AGENCY OR DEPARTMENT OF THE CITY HAVING JURISDICTION HAS ISSUED A PERMIT FOR CONSTRUCTION OF A PRIVATE HOME AND SUCH WORK HAS BEGUN IN GOOD FAITH IN ACCORDANCE WITH SUCH PERMIT. (B) "COMPLETE CONSTRUCTION" SHALL MEAN THAT THE AGENCY OR DEPARTMENT OF THE CITY HAVING JURISDICTION HAS ISSUED A TEMPORARY OR PERMANENT CERTIFICATE OF OCCUPANCY FOR ALL RESIDENTIAL AREAS OF THE PRIVATE HOME. (C) "ELIGIBLE PROJECT" SHALL MEAN A NEWLY CONSTRUCTED PRIVATE HOME, INCLUDING BOTH LAND AND IMPROVEMENTS, TO BE OCCUPIED AS A RESIDENCE FOR THE FIRST TIME, WHICH COMMENCES CONSTRUCTION ON OR AFTER JULY FIRST, TWO THOUSAND TEN AND ON OR BEFORE DECEMBER THIRTY-FIRST, TWO THOUSAND FOUR- TEEN, AND COMPLETES CONSTRUCTION NO LATER THAN DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN, AND WHICH IS DESIGNED AND OCCUPIED EXCLUSIVELY FOR RESIDENTIAL PURPOSES. (D) "EXEMPTION COMMENCEMENT DATE" SHALL MEAN THE FIRST TAXABLE STATUS DATE AFTER THE LATER TO OCCUR OF THE COMPLETION OF SUCH CONSTRUCTION OR THE SALE TO THE INITIAL PURCHASER OR, IN THE CASE OF A PRIVATE HOME IN A CONDOMINIUM FORM OF OWNERSHIP, THE FIRST TAXABLE STATUS DATE AFTER THEEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10569-01-1 S. 4381 2
LATER TO OCCUR OF THE COMPLETION OF SUCH CONSTRUCTION OR THE SALE TO THE FIRST INITIAL PURCHASER OF A CONDOMINIUM DWELLING UNIT IN SUCH PRIVATE HOME. (E) "INITIAL PURCHASER" SHALL MEAN THE FIRST PURCHASER OF A NEWLY CONSTRUCTED PRIVATE HOME OR, IN THE CASE OF A PRIVATE HOME IN A CONDO- MINIUM FORM OF OWNERSHIP, THE FIRST PURCHASER OF EACH DWELLING UNIT IN SUCH NEWLY CONSTRUCTED PRIVATE HOME. (F) "LOCAL HOUSING AGENCY" SHALL MEAN AN "AGENCY" AS DEFINED PURSUANT TO SECTION SIX HUNDRED NINETY-TWO OF THE GENERAL MUNICIPAL LAW. (G) "PURCHASE PRICE" SHALL MEAN THE ACTUAL PURCHASE PRICE TO BE PAID FOR THE PRIVATE HOME BY THE INITIAL PURCHASER. (H) "MAXIMUM PURCHASE PRICE" SHALL MEAN THE PURCHASE PRICE OF A PRIVATE HOME WHICH, IF EXCEEDED, WILL MAKE ANY EXEMPTION PURSUANT TO THIS SECTION UNAVAILABLE. (I) "MAXIMUM EXEMPTION AMOUNT" SHALL MEAN THE PORTION OF THE PURCHASE PRICE TO BE EXEMPTED FROM TAXATION OF: (I) SIX HUNDRED SEVENTY-ONE THOU- SAND DOLLARS IN THE CASE OF A PRIVATE HOME CONTAINING ONE DWELLING UNIT, (II) SEVEN HUNDRED FIFTY-FIVE THOUSAND FIVE HUNDRED FORTY DOLLARS IN THE CASE OF A PRIVATE HOME CONTAINING TWO DWELLING UNITS, (III) NINE HUNDRED FOURTEEN THOUSAND SEVEN HUNDRED FIFTY DOLLARS IN THE CASE OF A PRIVATE HOME CONTAINING THREE DWELLING UNITS, AND (IV) FOUR HUNDRED THOUSAND DOLLARS FOR EACH INDIVIDUAL CONDOMINIUM UNIT IN THE CASE OF CONDOMINIUM FORM OF OWNERSHIP IN A PRIVATE HOME. THE MAXIMUM PURCHASE PRICES PROVIDED IN SUBPARAGRAPHS (I), (II), (III) AND (IV) OF THIS PARAGRAPH SHALL BE THE LIMIT FOR THE APPLICATION OF ANY EXEMPTION FROM TAXATION UNDER THIS SECTION. NO EXEMPTION SHALL BE AVAILABLE WHERE THE MAXIMUM PURCHASE PRICE EXEMPTION IS IN EXCESS OF NINE HUNDRED FIFTY THOUSAND DOLLARS FOR A ONE, TWO OR THREE FAMILY PRIVATE HOME, OR FOUR HUNDRED THOUSAND DOLLARS FOR AN INDIVIDUAL CONDOMINIUM UNIT. (J) "MULTIPLE DWELLING" SHALL MEAN A MULTIPLE DWELLING WITHIN THE MEANING OF SECTION FOUR OF THE MULTIPLE DWELLING LAW. (K) "PRIVATE HOME" SHALL MEAN AN OWNER OCCUPIED PRIVATE OR MULTIPLE DWELLING CONTAINING NOT MORE THAN THREE DWELLING UNITS, AS INDICATED ON THE CERTIFICATE OF OCCUPANCY FOR SUCH STRUCTURE. 2. (A) WITHIN A CITY HAVING A POPULATION OF ONE MILLION OR MORE, AN ELIGIBLE PROJECT SHALL BE EXEMPT FROM ALL LOCAL AND MUNICIPAL TAXES, OTHER THAN ASSESSMENTS FOR LOCAL IMPROVEMENTS, DURING THE TAX YEAR OR YEARS NEXT FOLLOWING THE EXEMPTION COMMENCEMENT DATE AS FOLLOWS: WITH RESPECT TO PRIVATE HOMES CONTAINING LESS THAN FOUR DWELLING UNITS, TWO YEARS OF EXEMPTION FROM ALL SUCH TAXES; FOLLOWED BY ONE YEAR OF EXEMPTION FROM SEVENTY-FIVE PERCENT OF SUCH TAXES; FOLLOWED BY ONE YEAR OF EXEMPTION FROM SIXTY-TWO AND ONE-HALF PERCENT OF SUCH TAXES; FOLLOWED BY ONE YEAR OF EXEMPTION FROM FIFTY PERCENT OF SUCH TAXES; FOLLOWED BY ONE YEAR OF EXEMPTION FROM THIRTY-SEVEN AND ONE-HALF PERCENT OF SUCH TAXES; FOLLOWED BY ONE YEAR OF EXEMPTION FROM TWENTY-FIVE PERCENT OF SUCH TAXES; AND FOLLOWED BY ONE YEAR OF EXEMPTION FROM TWELVE AND ONE-HALF PERCENT OF SUCH TAXES. (B) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI- SION, EXEMPTION FROM LOCAL AND MUNICIPAL TAXES UNDER THIS SECTION SHALL NOT BE AVAILABLE TO THE TAX LOT (LAND AND IMPROVEMENTS) UPON WHICH A PRIVATE HOME IS CONSTRUCTED IF ANY PORTION OF SUCH TAX LOT (LAND AND IMPROVEMENTS): (I) IS EXEMPT FROM LOCAL AND MUNICIPAL TAXES UNDER ANY OTHER PROVISION OF LAW; OR (II) CONTAINS A PRIVATE HOME THAT EXCEEDS THE MAXIMUM PURCHASE PRICE OR AN INDIVIDUAL CONDOMINIUM UNIT THAT EXCEEDS A PURCHASE PRICE OF FOUR HUNDRED THOUSAND DOLLARS.S. 4381 3
(C) NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI- SION, THE TAX LOT (LAND AND IMPROVEMENTS) UPON WHICH THE PRIVATE HOME IS CONSTRUCTED SHALL AT ALL TIMES BE SUBJECT TO LOCAL AND MUNICIPAL TAXES IN AN AMOUNT NOT LESS THAN THE AMOUNT OF LOCAL AND MUNICIPAL TAXES THAT WOULD BE PAYABLE THEREON BASED UPON THE ASSESSED VALUATION OF THE LAND APPEARING ON THE ASSESSMENT ROLL IN THE FIRST YEAR AFTER COMPLETION OF CONSTRUCTION. 3. (A) BASED ON THE CERTIFICATION OF THE LOCAL HOUSING AGENCY PURSUANT TO THIS SECTION CERTIFYING ELIGIBILITY FOR EXEMPTION PURSUANT TO THIS SECTION, THE DEPARTMENT OF FINANCE OF THE CITY OF NEW YORK SHALL IMPLE- MENT THE AMOUNT OF EXEMPTION FROM LOCAL AND MUNICIPAL TAXES. (B) THE LOCAL HOUSING AGENCY MAY PROMULGATE RULES AND REGULATIONS TO CARRY OUT THE PROVISIONS OF THIS SECTION AND MAY REQUIRE PAYMENT OF A NON-REFUNDABLE FILING FEE IN THE AMOUNT OF TWO HUNDRED DOLLARS PER DWELLING UNIT FOR EACH APPLICATION FOR TAX EXEMPTION PURSUANT TO THIS SECTION. (C) UPON A FINDING BY THE LOCAL HOUSING AGENCY OR BY ANOTHER AGENCY DESIGNATED BY SUCH LOCAL HOUSING AGENCY THAT A PRIVATE HOME IS NOT BEING USED FOR RESIDENTIAL PURPOSES, IS THE SUBJECT OF A VIOLATION FOR AN ILLEGAL OCCUPANCY, OR NOT OWNER OCCUPIED, EXEMPTION FROM TAXATION UNDER THIS SECTION SHALL BE REVOKED AND SHALL TERMINATE PROSPECTIVELY; PROVIDED, HOWEVER, THAT IN THE CASE OF AN ILLEGAL OCCUPANCY, THE OWNER SHALL REPAY ALL TAXES, WITH INTEREST, FROM WHICH SUCH PRIVATE HOME WAS EXEMPTED AND SUCH AMOUNT, IF UNPAID, SHALL BECOME A TAX LIEN AGAINST THE PROPERTY. S 2. This act shall take effect immediately.