S4381-2011 - NY Senate Open Legislation - 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

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.

Sponsor: YOUNG

Co-sponsor(s): LANZA, SAVINO

Law Section: Real Property Tax Law
Law: Add S421-1, RPT L

S4381-2011 Actions

Jan 4, 2012: REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
Jun 24, 2011: COMMITTED TO RULES
Jun 14, 2011: ADVANCED TO THIRD READING
Jun 13, 2011: 2ND REPORT CAL.
Jun 13, 2011: AMENDED 4381A
Jun 13, 2011: 2ND REPORT CAL.
Jun 7, 2011: 1ST REPORT CAL.1034
Apr 1, 2011: REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT

S4381-2011 Meetings

Housing, Construction and Community Development: Jun 7, 2011

S4381-2011 Calendars

Floor Calendar: Jun 13, 2011

S4381-2011 Votes

VOTE: COMMITTEE VOTE: - Housing, Construction and Community Development - Jun 7, 2011

Ayes (5): Young, Bonacic, Gallivan, Grisanti, Ritchie
Nays (3): Espaillat, Diaz, Krueger

S4381-2011 Memo

BILL NUMBER:S4381

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.

S4381-2011 Text


                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    4381

                         2011-2012 Regular Sessions

                              I N  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  THE

   EXPLANATION--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.

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S4381-2011: 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