N.Y. Real Property Tax Law § 421-p*2: Exemption of capital improvements to residential new construction involving the creation of accessory dwelling units

* § 421-p. Exemption of capital improvements to residential new

construction involving the creation of accessory dwelling units. 1.

Residential buildings reconstructed, altered, improved, or newly

constructed in order to create one or more additional residential

dwelling units on the same parcel as a pre-existing residential building

to provide independent living facilities for one or more persons

subsequent to the effective date of a local law or resolution enacted

pursuant to this section shall be exempt from taxation and special ad

valorem levies to the extent provided hereinafter. After a public

hearing, the governing board of a county, city, town or village may

adopt a local law and a school district, other than a school district

subject to article fifty-two of the education law, may adopt a

resolution to grant the exemption authorized pursuant to this section. A

copy of such local law or resolution shall be filed with the

commissioner and the assessor of such county, city, town or village who

prepares the assessment roll on which the taxes of such county, city,

town, village or school district are levied.

2. (a) Such buildings shall be exempt for a period of five years to

the extent of one hundred per centum of the increase in assessed value

thereof attributable to such reconstruction, alteration, improvement, or

new construction for such additional residential unit or units that

provide independent living facilities for one or more persons, and for

an additional period of five years subject to the following:

(i) The extent of such exemption shall be decreased by twenty-five per

centum of the "exemption base" for each of the first three years during

such additional period and shall be decreased by a further ten per

centum of the "exemption base" during each of the final two years of

such additional period. The exemption shall expire at the end of the

extended period. The "exemption base" shall be the increase in assessed

value as determined in the initial year of the term of the exemption,

except as provided in subparagraph (ii) of this paragraph.

(ii) In any year in which a change in level of assessment of fifteen

percent or more is certified for a final assessment roll pursuant to the

rules of the commissioner, the exemption base shall be multiplied by a

fraction, the numerator of which shall be the total assessed value of

the parcel on such final assessment roll (after accounting for any

physical or quantity changes to the parcel since the immediately

preceding assessment roll), and the denominator of which shall be the

total assessed value of the parcel on the immediately preceding final

assessment roll. The result shall be the new exemption base. The

exemption shall thereupon be recomputed to take into account the new

exemption base, notwithstanding the fact that the assessor receives

certification of the change in level of assessment after the completion,

verification and filing of the final assessment roll. In the event the

assessor does not have custody of the roll when such certification is

received, the assessor shall certify the recomputed exemption to the

local officers having custody and control of the roll, and such local

officers are hereby directed and authorized to enter the recomputed

exemption certified by the assessor on the roll. The assessor shall give

written notice of such recomputed exemption to the property owner, who

may, if such property owner believes that the exemption was recomputed

incorrectly, apply for a correction in the manner provided by title

three of article five of this chapter for the correction of clerical

errors.

(iii) Such exemption shall be limited to two hundred thousand dollars

in increased market value of the property attributable to such

reconstruction, alteration, improvement, or new construction and any

increase in market value greater than such amount shall not be eligible

for the exemption pursuant to this section. For the purposes of this

section, the market value of the reconstruction, alteration,

improvement, or new construction as authorized by subdivision one of

this section shall be equal to the increased assessed value attributable

to such reconstruction, alteration, improvement, or new construction

divided by the class one ratio in a special assessing unit or the most

recently established state equalization rate or special equalization

rate in the remainder of the state, except where the state equalization

rate or special equalization rate equals or exceeds ninety-five percent,

in which case the increase in assessed value attributable to such

reconstruction, alteration, improvement, or new construction shall be

deemed to equal the market value of such reconstruction, alteration,

improvement, or new construction.

(b) No such exemption shall be granted for reconstruction,

alterations, improvements, or new construction unless:

(i) such reconstruction, alteration, improvement, or new construction

was commenced subsequent to the effective date of the local law or

resolution adopted pursuant to subdivision one of this section; and

(ii) the value of such reconstruction, alteration, improvement, or new

construction exceeds three thousand dollars; and

(iii) such reconstruction, alteration, improvement, or new

construction created one or more additional residential dwelling units

on the same parcel as the pre-existing residential building to provide

independent living facilities for one or more persons.

(c) For purposes of this section the terms reconstruction, alteration,

improvement, and new construction shall not include ordinary maintenance

and repairs.

3. Such exemption shall be granted only upon application by the owner

of such building on a form prescribed by the commissioner. The

application shall be filed with the assessor of the city, town, village

or county having the power to assess property for taxation on or before

the appropriate taxable status date of such city, town, village or

county.

4. If satisfied that the applicant is entitled to an exemption

pursuant to this section, the assessor shall approve the application and

such building shall thereafter be exempt from taxation and special ad

valorem levies as herein provided commencing with the assessment roll

prepared on the basis of the taxable status date referred to in

subdivision three of this section. The assessed value of any exemption

granted pursuant to this section shall be entered by the assessor on the

assessment roll with the taxable property, with the amount of the

exemption shown in a separate column.

5. For the purposes of this section, a residential building shall mean

any building or structure designed and occupied exclusively for

residential purposes by not more than two families.

6. In the event that a building granted an exemption pursuant to this

section ceases to be used primarily for residential purposes, or title

thereto is transferred to other than the heirs or distributees of the

owner, the exemption granted pursuant to this section shall cease.

7. (a) A county, city, town or village may, by its local law, or

school district, by its resolution:

(i) reduce the per centum of exemption otherwise allowed pursuant to

this section; and

(ii) limit eligibility for the exemption to those forms of

reconstruction, alterations, improvements, or new construction as are

prescribed in such local law or resolution.

(b) No such local law or resolution shall repeal an exemption granted

pursuant to this section until the expiration of the period for which

such exemption was granted.

* NB There are two § 421-p's