N.Y. Private Housing Finance Law § 125: Tax exemptions

§ 125. Tax exemptions. 1. (a) The local legislative body of any

municipality in which a project of such company is or is to be located

may by contract agree with any redevelopment company to exempt from

local and municipal taxes, other than assessments for local

improvements, all or part of the value of the property included in such

project which represents an increase over the assessed valuation of the

real property, both land and improvements, acquired for the project at

the time of its acquisition by the redevelopment company which

originally undertook the project and for such definite period of years

as such contract may provide, except that where the real property in a

project was acquired for purposes of rehabilitation, the local

legislative body either may utilize the foregoing formula or may agree

to exempt from such taxes all or part of the value of the property

included in such project on condition that the amount of such taxes to

be paid shall not be less than ten per centum of the annual shelter rent

or carrying charges of such rehabilitation project. The tax exemption

shall not operate for a period of more than twenty-five years,

commencing in each instance from the date on which the benefits of such

exemption first become available and effective; provided, however, that

with respect to a project either acquired by a mutual redevelopment

company pursuant to section one hundred twenty-six or owned and

continuing to be owned by a mutual redevelopment company which would

require substantial increases in carrying charges after the period of

tax exemption is ended unless relief is provided, the local legislative

body may contract with such mutual redevelopment company to extend such

tax exemption for not more than twenty-five additional years at a rate

of tax exemption not to exceed an average of fifty per centum during

such additional period, provided that the tax exemption during the first

two years of such additional period shall continue at the rate of the

tax exemption of such project immediately preceding the termination of

the initial twenty-five year period and that the tax exemption

thereafter shall be decreased in equal biennial decrements, the first of

which shall occur immediately following such two year period, and

provided that such contract shall contain provisions as to income

limitations relating to admission and continued occupancy of the project

and provisions as to rental surcharges to the same effect as are

contained in subdivisions two, three, four and five of section

thirty-one, except that in the case of projects owned and continuing to

be owned by mutual redevelopment companies, persons or families whose

probable aggregate annual income does not exceed the median income for

families of the same size in the same metropolitan area shall also be

eligible for admission to the project on the understanding that any

person or family becoming eligible by reason hereof whose probable

aggregate annual income at the time of admission or during the period of

occupancy exceeds, the greater of (i) the median income for such persons

or families for the metropolitan statistical area in which the project

is located, or if a project is located outside a metropolitan

statistical area, the median income for such persons or families for the

county in which the project is located, as most recently determined by

the United States department of housing and urban development, in which

case any person or family becoming eligible for admission pursuant to

this subparagraph shall pay, from the time of admission, a rental

surcharge as provided for in subdivision three of section thirty-one of

this chapter, computed on the basis of the income limitations applicable

to such persons or families in the absence of this subparagraph, or (ii)

six times the rental shall be liable for payment of rental surcharges

hereunder computed on the basis of such ratio, except that in the case

of families with three or more dependents such ratio shall be seven to

one; and provided further that with respect to a project which is or is

to be permanently financed by a federally-aided mortgage, the tax

exemption shall operate for so long as such mortgage is outstanding, but

in no event for a period of more than forty years, commencing in each

instance from the date on which the benefits of such exemption first

become available and effective; and provided further that with respect

to a project which is or is to be permanently financed by a loan from

the New York city housing development corporation, the tax exemption

shall operate for so long as such loan is outstanding.

(a-1) Where the redevelopment contract between a mutual redevelopment

company and the local legislative body under which the initial tax

exemption was granted contains provisions different from those in

subdivisions two, three, four and five of section thirty-one of this

chapter, then a contract to extend the tax exemption for an additional

period under paragraph (a) of this subdivision may provide that those

provisions of the redevelopment contract shall continue to apply (with

such modifications as the supervising agency of such mutual

redevelopment company shall approve) during the additional period as if

such additional period were the initial period of tax exemption for such

mutual redevelopment company, notwithstanding the provisions of

paragraph (a) of this subdivision to the contrary.

(a-2) Any inconsistent provision of law notwithstanding, in a city

having a population of one million or more, where a local legislative

body has acted to extend the tax exemption of a mutual redevelopment

company for an additional twenty-five years after the initial tax

exemption period has expired, the local legislative body may authorize

tax exemption during the final eleven years of such additional

twenty-five year exemption period under this subdivision, provided that

the amount of taxes to be paid by the mutual redevelopment company

during the final eleven years of such additional twenty-five year

exemption period shall not be less than an amount equal to the greater

of (i) ten per centum of the annual rent or carrying charges of the

project minus utilities for the residential portion of the project, or

(ii) the taxes payable by such company for the residential portion of

the project in the fourteenth year of such additional twenty-five year

exemption period, and may further extend the period of such additional

twenty-five year exemption for up to a total period of thirty-five years

from the date of expiration of the initial tax exemption, provided that

the amount of taxes to be paid by the mutual redevelopment company

during any such extension beyond such additional twenty-five year

exemption period shall not be less than an amount equal to the greater

of (i) ten per centum of the annual rent or carrying charges of the

project minus utilities for the residential portion of the project, or

(ii) the taxes payable by such company for the residential portion of

the project in the fourteenth year of such additional twenty-five year

exemption period.

(a-3) Any inconsistent provision of law notwithstanding, the local

legislative body of any municipality may grant an additional tax

exemption period for any project, other than a project by a mutual

redevelopment company, that received a tax exemption under paragraph (a)

of this subdivision, upon the expiration of the tax exemption period.

The additional tax exemption period may be for a term of forty years, or

until such time as the project is no longer operated under the

restrictions and for the purposes set forth in this article, whichever

is sooner. Unless otherwise approved by the local legislative body, the

amount of taxes paid by the redevelopment company during such additional

tax exemption period shall not be less than (i) the taxes payable by

such company in accordance with the resolution for such redevelopment

company that was approved by the local legislative body and that was in

effect immediately prior to the expiration of the initial tax exemption

period, or (ii) if there is no such resolution, the taxes payable by

such company in accordance with the exemption authorized pursuant to

this article immediately prior to the expiration of the initial tax

exemption period.

(a-4) Any inconsistent provision of law notwithstanding, in a city

having a population of one million or more, where a local legislative

body has acted to extend the tax exemption of a mutual redevelopment

company for the maximum period provided for in paragraph (a-2) of this

subdivision, the local legislative body may grant an additional tax

exemption for a period of up to fifty years, provided that the amount of

taxes to be paid during any such period of tax exemption shall be not

less than an amount equal to the lesser of (i) five per centum of the

annual rent or carrying charges of the project minus utilities for the

residential portion of the project, or (ii) the taxes payable by such

company for the residential portion of the project during the tax year

commencing July first, two thousand and ending on June thirtieth, two

thousand one. Such grant of an additional tax exemption period shall

take effect upon the expiration of the maximum period provided for in

paragraph (a-2) of this subdivision.

(a-5) Any inconsistent provision of law notwithstanding, including but

not limited to any limitation in paragraph (a) of this subdivision, the

local legislative body of any municipality within the County of Nassau,

with respect to a project either: (i) acquired by a mutual redevelopment

company pursuant to section one hundred twenty-six of this article; or

(ii) owned and continuing to be owned by a mutual redevelopment company

where there is a restriction that said housing must be occupied by

seniors with a minimum age of fifty-five as a condition to any

restrictive covenants of said mutual redevelopment company, which would

require substantial increases in carrying or maintenance charges after

the initial period of tax exemption is ended or is going to require

increases in the carrying or maintenance charges during any such

extended tax exemption pursuant to a present extension agreement due to

the reduction or elimination of the tax exemption provided to the

project immediately preceding the termination of the initial twenty-five

year period, unless relief is provided, may contract with such mutual

redevelopment company to: (i) extend such tax exemption for not more

than twenty-five additional years at the rate of the tax exemption of

such project immediately preceding the termination of the initial

twenty-five year period for all of the additional twenty-five year

period; or (ii) modify an existing extended tax exemption to provide for

such an extension.

(b) A redevelopment company which has been granted and has received

tax exemption pursuant to this section may at any time elect to pay to

the municipality or other appropriate taxing jurisdiction the total of

all accrued taxes for which exemption was granted and received, together

with interest at the rate of five per centum per annum. Upon such

payment the tax exemption of the project shall thereupon cease and

terminate.

(c) Where a municipality acts on behalf of another taxing jurisdiction

in assessing real property for the purpose of taxation, or in levying

taxes therefor, the said agreement by the local legislative body of such

municipality shall have the effect of exempting the real property in a

project from local and municipal taxes, other than assessments for local

improvements, levied by or in behalf of both such taxing jurisdictions.

(d) As used in this subdivision the term "taxing jurisdiction" means

any municipal corporation or district corporation, including any school

district or any special district, having the power to levy or collect

taxes and benefit assessments upon real property, or in whose behalf

such taxes or benefit assessments may be levied or collected.

2. Any inconsistent provision of law notwithstanding, mortgages of any

such company issued to the federal government or any instrumentality

thereof, or to any municipal housing authority or other public housing

agency or instrumentality thereof whose obligations are determined to be

exempt from federal taxation by the federal government, or issued to a

financial institution and insured or guaranteed by the federal housing

administrator or any other instrumentality of the federal government

shall be exempt from the mortgage recording taxes imposed by article

eleven of the tax law.