Section 421-P - [Multiple versions] Exemption of capital improvements to residential new construction involving the creation of accessory dwelling units1. 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.N.Y. Real Prop. Tax. Law § 421-P
Added by New York Laws 2024, ch. 56,Sec. GG-2, eff. 4/20/2024, op. to assessment rolls based on taxable status dates occurring on or after 4/20/2024.