N.Y. Private Housing Finance Law § 33: Tax exemptions

§ 33. Tax exemptions. 1. (a) Upon the consent of the local legislative

body of any municipality in which a project is or is to be located, the

real property in a project shall be exempt from local and municipal

taxes, other than assessments for local improvements, to the extent of

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 limited-profit housing company, provided, however,

that the real property in a project acquired for purposes of

rehabilitation shall be exempt to the extent of all or part of the value

of the property included in such project, and further provided 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 project except that

for projects located or to be located in a city of a population of one

million or more, the amount of such taxes shall be no more than five per

centum of the annual shelter rent or carrying charges of the project.

Upon the consent of the local legislative body of a municipality, other

than a city with a population of one million or more, in which the

project is located, the amount of such taxes may be further reduced to

five per centum or less of the annual shelter rent or carrying charges

of the project. Any such granted consent to reduce the amount of such

taxes shall expire every ten years. If such authorization is not

renewed, the rate of taxation shall revert to the level established

before the consent was granted. Shelter rent shall mean the total rents

received from the occupants of a project less the cost of providing to

the occupants electricity, gas, heat and other utilities. Total rents

shall include rent supplements and subsidies received from the federal

government, the state or a municipality on behalf of such occupants but

shall not include interest reduction payments pursuant to subdivision

(a) of section two hundred one of the Federal Housing and Urban

Development Act of nineteen hundred sixty-eight. The tax exemption shall

operate and continue so long as the mortgage loans of the company,

including any additional mortgage loan the proceeds of which are used

primarily for the residential portion of the project, which additional

loan is approved by the commissioner or the supervising agency, are

outstanding.

(b) 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 consent of 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.

As used in this paragraph, 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.

(c) Notwithstanding the provisions of paragraphs (a) and (b) of this

subdivision, the real property of a state urban development corporation

project acquired, owned, constructed, managed or operated by a company

incorporated pursuant to the not-for-profit corporation law and this

article shall be entitled to all the benefits provided by section four

hundred twenty-two of the real property tax law. The real property of a

state urban development corporation project, other than a state urban

development corporation project acquired, owned, constructed, managed or

operated by a company incorporated pursuant to the not-for-profit

corporation law and this article, shall be exempt from all local and

municipal taxes, other than assessments for local improvements, to the

extent of the value of the property included in such project as

represents an increase over the assessed valuation of the real property,

both land and improvements, acquired for the project on the date of its

acquisition by the limited-profit housing company, provided 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 project, as defined

in paragraph (a) hereof, except that in a city with a population of one

million or more, the amount of such taxes shall be no more than five per

centum of the annual shelter rent or carrying charges of the project.

Upon the consent of the local legislative body of the municipality,

other than a city with a population of one million or more, in which the

project is located, the amount of such taxes may be further reduced to

five per centum or less of the annual shelter rent or carrying charges

of the project. Any such granted consent to reduce the amount of such

taxes shall expire every ten years. If such authorization is not

renewed, the rate of taxation shall revert to the level established

before the consent was granted. The tax exemption shall operate and

continue so long as the mortgage loans of such limited profit housing

company, including any additional mortgage loan the proceeds of which

are used primarily for the residential portion of the project, which

additional loan is approved by the commissioner or the supervising

agency, are outstanding and the project is continued to be operated as a

limited-profit housing project. If a state urban development corporation

project qualifying for tax exemption pursuant to this paragraph is sold,

with the approval of the commissioner, to another limited-profit housing

company, such successor company shall be entitled to all the benefits of

this paragraph. In the event that such sale is to a company incorporated

pursuant to the not-for-profit corporation law and this article, such

successor company shall be entitled to all the benefits provided by

section four hundred twenty-two of the real property tax law.

(d) Notwithstanding the provisions of paragraphs (a) and (b) of this

subdivision, when a project is financed with a mortgage loan pursuant to

this article or article three of this chapter and (i) there is a

participation, new loan or investment pursuant to section twenty-three-b

of this article or (ii) such mortgage loan is assigned, modified or

satisfied pursuant to section twenty-three-a or forty-four-b or

subdivision twenty-two-a of section six hundred fifty-four of this

chapter, the real property of the project shall be exempt from all local

and municipal taxes, other than assessments for local improvements, to

the extent of the value of the real 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 on the

date of its original acquisition for the project by the original

mortgagor under a mortgage loan pursuant to this article or article

three of this chapter, provided that the amount of taxes to be paid on

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

rent or carrying charges of such project, as defined in paragraph (a) of

this subdivision, except that in a city with a population of one million

or more, the amount of such taxes shall be no more than five per centum

of the annual shelter rent or carrying charges of the project. Upon the

consent of the local legislative body of the municipality, other than a

city with a population of one million or more, in which the project is

located, the amount of such taxes may be further reduced to five per

centum or less of the annual shelter rent or carrying charges of the

project. Any such granted consent to reduce the amount of such taxes

shall expire every ten years. If such authorization is not renewed, the

rate of taxation shall revert to the level established before the

consent was granted. Such tax exemption shall commence in each instance

from the date when the project becomes subject to a mortgage insured by

the federal government and shall operate and continue so long as a

mortgage on such project is insured or held by the federal government or

so long as the project is thereafter owned by the federal government or

so long as any residual indebtedness is outstanding, whichever is

longer. When there is a participation, new loan or investment pursuant

to section twenty-three-b of this article, such participation, new loan

or investment shall be deemed to be the equivalent of a federally

insured mortgage for purposes of this paragraph. Nothing contained in

this paragraph shall be construed to limit or otherwise impair the

benefits available to any company eligible for exemption from taxation

pursuant to section thirty-one or section thirty-six-a of this article,

section four hundred twenty-two or section four hundred sixty-seven-c of

the real property tax law, or section fifty-eight of the public housing

law. The foregoing shall not be deemed to authorize any company to

receive the benefits of any exemption from taxation in contravention of

the provisions of section two of article eighteen of the constitution.

(e) Notwithstanding the provisions of paragraph (a) of this

subdivision, a municipality, with the approval of the local legislative

body, may contract to exclude all or part of any rent subsidies received

from the federal government pursuant to section eight of the United

States Housing Act of nineteen hundred thirty-seven as amended in the

computation of total rents received.

(f) Notwithstanding the provisions of paragraph (a) of this

subdivision, if the number of units occupied by persons receiving the

benefit of rental assistance payments from the federal government

pursuant to section eight of the United States Housing Act of nineteen

hundred thirty-seven, as amended, with respect to any project increases

by more than one hundred percent within any twelve consecutive months

prior to nineteen hundred eighty-five over the number of units for which

such subsidies were available during the preceding twelve consecutive

months or as July first, nineteen hundred eighty, whichever is later,

taxes payable for such additional subsidized units and subsequent units

subsidized in the same manner shall be based solely upon that portion of

total rents received on account of such additional subsidized units that

is not funded by such rental assistance payments, provided, however,

that no project shall receive such additional tax exemption (i) unless a

minimum of seventeen percent of the units in the project receive the

benefit of such subsidies, or (ii) if any mortgage on such project is

insured or held by the federal government or if the project is owned by

the federal government. The amount of exemption to which a project is

entitled pursuant to this paragraph shall be certified annually by the

commissioner or the supervising agency, as the case may be.

2. Notwithstanding the provisions of subdivision one hereof, whenever

a dwelling in a project is leased to the New York state housing finance

agency pursuant to the provisions of section forty-four-a of this

chapter, so much of the assessed value of such project attributable to

such dwelling (including a pro rata portion of the value of the land and

common spaces) as represents an increase over the proportionate assessed

value of the real property, both land and improvements, acquired for

such project at the time of original acquisition therefor, shall be

exempt during the period of such lease from taxation for county, city,

town, village and school district purposes and special ad valorem

levies; provided that if in any year the aggregate amount of such taxes

and levies that would have been attributable to such dwelling but for

the exemption provided by this subdivision exceeds the amount payable

out of the low rent lease account pursuant to subdivision three of

section forty-four-a of this chapter with respect to the agency's rent

obligation for such dwelling, the agency shall make proportional

payments in lieu of such taxes and levies to the appropriate county,

city, town, village, school district or special district, or any

combination thereof as the case may be, in an aggregate amount equal to

one half of the sum of (a) the amount of such excess and (b) the amount,

if any, by which the rent paid to the agency under the sublease for such

dwelling exceeds the agency's rent obligation for such dwelling. Nothing

contained in this subdivision shall preclude the increase of the taxable

assessed value attributable to such dwellings as a result of a net

increase in the assessed valuation of the taxable property in the

assessing unit as a result of assessing such property at a higher ratio

of full value.

3. Notwithstanding the provisions of subdivision one hereof, whenever

a dwelling in a project is leased to an authority, pursuant to the

provisions of sections seventeen and thirty-one of this chapter, so much

of the assessed value of such project attributable to such dwelling

(including a pro rata portion of the value of the land and common

spaces) as represents an increase over the proportionate assessed value

of the real property, both land and improvements, acquired for such

project at the time of original acquisition therefor, shall be exempt

during the period of such lease from taxation for county, city, town,

village and school district purposes and special ad valorem levies.

Nothing contained in this subdivision shall preclude the increase of the

taxable assessed value attributable to such dwelling as a result of a

net increase in the assessed valuation of the taxable property in the

assessing unit as a result of assessing such property at a higher ratio

of full value.

4. Notwithstanding the provisions of subdivision one hereof, when a

mutual company is organized under this article to facilitate the

acquisition of a building by residents thereof, the amount of local and

municipal taxes, other than assessments for local improvements, to be

paid on the real property included in such project, both land and

improvements, shall not exceed twenty per centum of the annual shelter

rent or carrying charges of such project, as defined in paragraph (a) of

subdivision one hereof; provided, however, that where such acquisition

of a building by residents thereof involves the financing of

rehabilitation or other improvement as well as acquisition, upon the

consent of the local legislative body of the municipality in which the

project is located the amount of such taxes may be further reduced

provided that such amount shall not be less than ten per centum of the

annual shelter rent or carrying charges of the project, as defined in

paragraph (a) of subdivision one hereof; or the company may in lieu of

requesting such consent apply for the benefits of the local law, if any,

enacted pursuant to section four hundred eighty-nine of the real

property tax law. Notwithstanding any other provision of this

subdivision, in a city with a population of one million or more, the

amount of such taxes shall be no more than five per centum of the annual

shelter rent or carrying charges of the project. Upon the consent of the

local legislative body of the municipality, other than a city with a

population of one million or more, in which the project is located, the

amount of such taxes may be further reduced to five per centum or less

of the annual shelter rent or carrying charges of the project. Any such

granted consent to reduce the amount of such taxes shall expire every

ten years. If such authorization is not renewed, the rate of taxation

shall revert to the level established before the consent was granted.

Such tax exemption, if any, granted pursuant to this article shall

operate and continue so long as a loan made under this article or any

subsequent loan approved by the commissioner or the supervising agency

to enhance the residential portion of the project and the project is

continued to be operated for the purposes set forth in this article is

outstanding.

5. Bonds, mortgages, notes, income debentures and obligations of a

company are declared to be issued for a public purpose and to be public

instrumentalities and together with interest thereon shall be exempt

from tax including but not limited to the mortgage recording taxes

imposed by article eleven of the tax law.

6. Any project that received a tax exemption under paragraphs (a), (c)

and (d) of subdivision one, and subdivision four of this section may,

upon the expiration of the tax exemption period, be granted an

additional tax exemption period of up to fifty 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.