N.Y. Real Property Tax Law 489-BBBB – Power to enact local law; real property tax exemption; deferral of tax payments
§ 489-bbbb. Power to enact local law; real property tax exemption; deferral of tax payments. Any city having a population of one million or more, acting through its local legislative body, is authorized and empowered to determine that incentives in the form of exemption from or abatement or deferral of payment of real property taxes are necessary to encourage industrial and commercial development in such city and to enact a local law providing that such benefits shall be provided in the manner set forth in this title. Such city shall be divided into six classes of areas as provided in this title and pursuant to designation of areas to be made by a temporary commercial incentive area boundary commission. Within such areas, the following benefits shall be available to qualified recipients:
Terms Used In N.Y. Real Property Tax Law 489-BBBB
- Approved plans: means plans submitted to and approved by the department of buildings in connection with the applicant's building permit, including any amendments to such plans approved by such department before final inspection of the work for which such permit was issued. See N.Y. Real Property Tax Law 489-AAAA
- Benefit period: means the period of time when a recipient is eligible to receive benefits pursuant to this title, including in the case of a recipient of a certificate of eligibility for commercial construction work in a deferral area, the period of time tax payments are to be deferred, the interim period when no tax payments are to be deferred and no deferred tax payments are required to be made, and the period of time when the deferred tax payments are to be made. See N.Y. Real Property Tax Law 489-AAAA
- Commercial construction work: means the construction of a new building or structure, or portion thereof, or the modernization, rehabilitation, expansion, or other improvement of an existing building or structure, or portion thereof, for use as commercial property. See N.Y. Real Property Tax Law 489-AAAA
- Commercial revitalization area: means any area of a city having a population of one million or more, provided that in the city of New York a commercial revitalization area shall mean any district that is zoned C4, C5, C6, M1, M2, or M3 in accordance with the zoning resolution of such city in any area of such city except the area lying south of the center line of 96th Street in the borough of Manhattan. See N.Y. Real Property Tax Law 489-AAAA
- Commission: means the temporary commercial incentive area boundary commission. See N.Y. Real Property Tax Law 489-AAAA
- Deferral area: means an area in which deferral of payment of real property taxes in accordance with subdivision four of section four hundred eighty-nine-bbbb of this title shall be available to a recipient who has performed commercial construction work. See N.Y. Real Property Tax Law 489-AAAA
- Excluded area: means each area specified in paragraphs (a), (b) and (c) of subdivision five of section four hundred eighty-nine-cccc of this title. See N.Y. Real Property Tax Law 489-AAAA
- exemption base: shall mean , with respect to property that is the subject of a certificate of eligibility with an effective date of June thirtieth, nineteen hundred ninety-two or before: (i) for the first, second and third taxable years following the effective date of a certificate of eligibility, the assessed value of improvements made since the effective date of such certificate which are attributable exclusively to commercial or industrial construction work described in approved plans; and (ii) for all other years, the assessed value of such improvements which have been made before the fourth taxable status date following the effective date of such certificate. See N.Y. Real Property Tax Law 489-AAAA
- Industrial construction work: means the construction of a new building or structure or the modernization, rehabilitation, expansion or improvement of an existing building or structure for use as industrial property. See N.Y. Real Property Tax Law 489-AAAA
- Industrial property: means nonresidential property on which will exist after completion of industrial construction work a building or structure wherein at least seventy-five per centum of the total net square footage is used or immediately available and held out for use for manufacturing activities involving the assembly of goods or the fabrication or processing of raw materials. See N.Y. Real Property Tax Law 489-AAAA
- Lien: A claim against real or personal property in satisfaction of a debt.
- Person: means an individual, corporation, partnership, association, agency, trust, estate, foreign or domestic government or subdivision thereof, or other entity. See N.Y. Real Property Tax Law 489-AAAA
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Recipient: means an applicant to whom a certificate of eligibility has been issued pursuant to this title, or the successor in interest of such applicant, provided that where a person who has entered into a lease or purchase agreement with the owner or lessee of exempt property has been a co-applicant, such person or the successor in interest of such person shall be the recipient. See N.Y. Real Property Tax Law 489-AAAA
- Regular exemption area: means an area in which a regular exemption from taxes in accordance with subdivision three of section four hundred eighty-nine-bbbb of this title shall be available to a recipient who performs commercial construction work. See N.Y. Real Property Tax Law 489-AAAA
- Renovation construction work: means the modernization, rehabilitation, expansion or improvement of an existing building or structure, or portion thereof, for use as commercial property in a renovation exemption area where such modernization, rehabilitation, expansion or improvement is physically and functionally integrated with the existing building or structure, or portion thereof, does not increase the bulk of the existing building or structure by more than thirty per centum and does not increase the height of the existing building or structure by more than thirty per centum. See N.Y. Real Property Tax Law 489-AAAA
- Renovation exemption area: means the area specified in paragraph (d) of subdivision five of section four hundred eighty-nine-cccc of this title in which a renovation exemption from taxes in accordance with subdivision five of section four hundred eighty-nine-bbbb of this title shall be available to a recipient who performs renovation construction work. See N.Y. Real Property Tax Law 489-AAAA
- Residential construction work: means any construction, modernization, rehabilitation, expansion or improvement of dwelling units other than dwelling units in a hotel. See N.Y. Real Property Tax Law 489-AAAA
- Special exemption area: means an area in which the commission has determined that a special exemption from real property taxes in accordance with subdivision two of section four hundred eighty-nine-bbbb of this title shall be available to a recipient who performs commercial construction work and, in addition, means the area specified in paragraph (d) of subdivision four of section four hundred eighty-nine-cccc of this title. See N.Y. Real Property Tax Law 489-AAAA
1. (a) A recipient who, following the effective date of a certificate of eligibility, has performed industrial construction work in any area of such city shall be eligible for an exemption from real property taxes as follows: For the first thirteen tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following nine tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at ninety per centum thereof in the fourteenth tax year and decreasing by ten per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for industrial construction work: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 13 Tax on 100% of exemption base
14 Tax on 90% of exemption base
15 Tax on 80% of exemption base
16 Tax on 70% of exemption base
17 Tax on 60% of exemption base
18 Tax on 50% of exemption base
19 Tax on 40% of exemption base
20 Tax on 30% of exemption base
21 Tax on 20% of exemption base
22 Tax on 10% of exemption base
(b) Notwithstanding paragraph (a) of this subdivision, a recipient who filed an application for a certificate of eligibility for industrial construction work in any area of such city on or after July first, nineteen hundred ninety-five, and who, following the effective date of such certificate of eligibility, has performed such industrial construction work shall be eligible for an exemption from real property taxes as follows: For the first sixteen tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following nine tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at ninety per centum thereof in the seventeenth tax year and decreasing by ten per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for industrial construction work pursuant to this paragraph: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 Through 16 Tax on 100% of exemption base
17 Tax on 90% of exemption base
18 Tax on 80% of exemption base
19 Tax on 70% of exemption base
20 Tax on 60% of exemption base
21 Tax on 50% of exemption base
22 Tax on 40% of exemption base
23 Tax on 30% of exemption base
24 Tax on 20% of exemption base
25 Tax on 10% of exemption base
(c)(i) A recipient who filed an application for a certificate of eligibility for industrial construction work in any area of such city on or after July first, nineteen hundred ninety-five, and who, following the effective date of such certificate of eligibility, both commenced and completed such work, shall be eligible for an abatement of real property taxes as follows: For the first tax year immediately following completion of such work, and for the second, third and fourth tax years following completion of such work, the abatement shall equal fifty per centum of the real property tax that was imposed on the property which is the subject of the certificate of eligibility for the tax year immediately preceding the effective date of such certificate of eligibility, provided, however, that if such property was fully or partially exempt from real property taxes during such tax year, then the abatement shall equal fifty per centum of the real property tax that would have been imposed on such property but for such full or partial exemption. For the fifth and sixth tax years, the abatement shall equal forty per centum of such amount; for the seventh and eighth tax years, the abatement shall equal thirty per centum of such amount; for the ninth and tenth tax years, the abatement shall equal twenty per centum of such amount; and for the eleventh and twelfth tax years, the abatement shall equal ten per centum of such amount. Notwithstanding any inconsistent provision of this paragraph, a recipient shall not be eligible for an abatement for the first tax year following completion of such work, unless the recipient submits proof satisfactory to the department of finance that such work was completed on or before the taxable status date for such first tax year no later than thirty days after such taxable status date. Where the recipient fails to submit such proof in accordance with the foregoing sentence, a recipient shall not be eligible for an abatement until the second tax year following completion of such work. In such case, a recipient shall submit proof satisfactory to the department of finance that such work was completed on or before the taxable status date for such first tax year no later than thirty days after the taxable status date for such second tax year. A recipient whose abatement begins in the second tax year following completion of such work shall not thereby have his or her twelve-year benefit period shortened.
The following table shall illustrate the computation of the abatement for industrial construction work pursuant to this paragraph:
Tax year following
completion of industrial
construction work: Amount of abatement:
1 50%
2 50%
3 50%
4 50%
5 40%
6 40%
7 30%
8 30%
9 20%
10 20%
11 10%
12 10%
(ii) If, due to a determination of the department of finance or tax commission of such city or a court, the real property tax imposed on such property for the tax year immediately preceding the effective date of such certificate of eligibility is changed, then any abatement that was granted in accordance with this paragraph prior to such reduction shall be recalculated and any abatement to be granted in accordance with this paragraph shall be based on the real property tax imposed on such property for the tax year immediately preceding the effective date of such certificate of eligibility, as changed by such determination. The amount equal to the difference between the abatement originally granted and the abatement as so recalculated shall be deducted from any refund otherwise payable or remission otherwise due as a result of a change due to such determination, and any balance of such amount remaining unpaid after making any such deduction shall be paid to the department of finance within thirty days from the date of mailing by the department of finance of a notice of the amount payable. Such amount payable shall constitute a tax lien on such property as of the date of such notice and, if not paid within such thirty-day period, penalty and interest at the rate applicable to delinquent taxes on such property shall be charged and collected on such amount from the date of such notice to the date of payment.
(iii) No property which is the subject of a certificate of eligibility pursuant to this title shall receive more than one abatement pursuant to this title and no abatement shall exceed one consecutive twelve-year period as specified in subparagraph (i) of this paragraph.
(iv) In no event shall an abatement granted pursuant to this title exceed in any tax year the real property taxes imposed on the property which is the subject of a certificate of eligibility pursuant to this title.
(v) For the purpose of calculating an abatement of real property taxes pursuant to this title, where a tax lot contains more than one building or structure and not all of the buildings or structures comprising such tax lot are the subject of a certificate of eligibility for industrial construction work pursuant to this title, the real property taxes imposed on such tax lot for the tax year immediately preceding the effective date of such certificate of eligibility shall be apportioned among the buildings, structures and land comprising such tax lot and only such real property taxes as are allocable to the property which is the subject of the certificate of eligibility pursuant to this title shall be abated in accordance with this paragraph. Such apportionment shall be in accordance with rules promulgated by the department of finance.
(vi) A recipient who filed an application for a certificate of eligibility for industrial construction work in the commercial revitalization area on or after July first, two thousand, and who, following the effective date of such certificate of eligibility, both commenced and completed such work, shall be eligible for an abatement of real property taxes in accordance with subparagraph (i) of this paragraph, provided, however, that where the total net square footage of the industrial property used or immediately available and held out for use for manufacturing activities involving the assembly of goods or the fabrication or processing of raw materials is less than seventy-five per centum of the total net square footage of the industrial property, the abatement of real property taxes shall be determined in accordance with rules promulgated by the department of finance. Notwithstanding the foregoing sentence, no such abatement shall be allowed where the total net square footage of the industrial property used or immediately available and held out for use for such manufacturing actives after completion of industrial construction work is less than the total net square footage used or immediately available and held out for use for such manufacturing activities before the commencement of such construction work. For purposes of this subparagraph only, the term "industrial construction work" shall mean the modernization, rehabilitation, expansion or improvement of an existing building or structure for use as industrial property and the term "industrial property" shall mean nonresidential property on which will exist after completion of industrial construction work a building or structure wherein at least twenty-five per centum of the total net square footage is used or immediately available and held out for use for manufacturing activities involving the assembly of goods or the fabrication or processing of raw materials.
2. (a) A recipient who, following the effective date of a certificate of eligibility, has performed commercial construction work in a special exemption area shall be eligible for an exemption from real property taxes as follows: For the first thirteen tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following nine tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at ninety per centum thereof in the fourteenth tax year and decreasing by ten per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for commercial construction work in a special exemption area: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 13 Tax on 100% of exemption base
14 Tax on 90% of exemption base
15 Tax on 80% of exemption base
16 Tax on 70% of exemption base
17 Tax on 60% of exemption base
18 Tax on 50% of exemption base
19 Tax on 40% of exemption base
20 Tax on 30% of exemption base
21 Tax on 20% of exemption base
22 Tax on 10% of exemption base
(b) Notwithstanding paragraph (a) of this subdivision, a recipient who filed an application for a certificate of eligibility for commercial construction work in a special exemption area on or after July first, nineteen hundred ninety-five, and who, following the effective date of such certificate of eligibility, has performed such commercial construction work shall be eligible for an exemption from real property taxes as follows: For the first sixteen tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following nine tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at ninety per centum thereof in the seventeenth tax year and decreasing by ten per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for commercial construction work in a special exemption area pursuant to this paragraph: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 16 Tax on 100% of exemption base
17 Tax on 90% of exemption base
18 Tax on 80% of exemption base
19 Tax on 70% of exemption base
20 Tax on 60% of exemption base
21 Tax on 50% of exemption base
22 Tax on 40% of exemption base
23 Tax on 30% of exemption base
24 Tax on 20% of exemption base
25 Tax on 10% of exemption base
3. (a) A recipient who, following the effective date of a certificate of eligibility, has performed commercial construction work in a regular exemption area shall be eligible for an exemption from real property taxes as follows: For the first eight tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following four tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at eighty per centum thereof in the ninth tax year and decreasing by twenty per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for commercial construction work in a regular exemption area: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 8 Tax on 100% of exemption base
9 Tax on 80% of exemption base
10 Tax on 60% of exemption base
11 Tax on 40% of exemption base
12 Tax on 20% of exemption base
(b) Notwithstanding paragraph (a) of this subdivision, a recipient who filed an application for a certificate of eligibility for commercial construction work in a regular exemption area on or after July first, nineteen hundred ninety-five, and who, following the effective date of such certificate of eligibility, has performed such commercial construction work shall be eligible for an exemption from real property taxes as follows: For the first eleven tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following four tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at eighty per centum thereof in the twelfth tax year and decreasing by twenty per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for commercial construction work in a regular exemption area pursuant to this paragraph: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 11 Tax on 100% of exemption base
12 Tax on 80% of exemption base
13 Tax on 60% of exemption base
14 Tax on 40% of exemption base
15 Tax on 20% of exemption base
4. Except as provided in paragraphs (b) and (c) of subdivision five of section four hundred eighty-nine-cccc of this title, a recipient who, following the effective date of a certificate of eligibility, has performed commercial construction work in a deferral area shall be eligible for a deferral of tax payments as follows: For the first three tax years following the effective date of a certificate of eligibility, the tax payment on one hundred per centum of the exemption base shall be deferred. For the following four tax years, the tax payment on a percentage of the exemption base beginning at eighty per centum thereof in the fourth tax year and decreasing by twenty per centum each year shall be deferred. The total amount of tax payments deferred pursuant to this title shall be paid subsequently over the course of ten tax years as follows: Commencing in the eleventh tax year following the effective date of the certificate of eligibility, through and including the twentieth tax year following such effective date, an amount equal to ten per centum of the total amount of tax payments deferred pursuant to this section shall be added to the amount of tax otherwise assessed and payable in each such tax year on the property subject to such deferral.
The following table shall illustrate the computation of deferral and payment of taxes for commercial construction work in a deferral area: Tax year following effective date of certificate of Amount of tax payments to eligibility: be deferred or paid:
1 through 3 Deferral of tax payment on 100%
of the exemption base
4 Deferral of tax payment on 80%
of the exemption base
5 Deferral of tax payment on 60%
of the exemption base
6 Deferral of tax payment on 40%
of the exemption base
7 Deferral of tax payment on 20%
of the exemption base
11 through 20 Payment each year of 10% of
total dollar amount of tax
payments deferred pursuant
to this title
5. A recipient who, following the effective date of a certificate of eligibility, has performed renovation construction work in a renovation exemption area shall be eligible for an exemption from real property taxes as follows: For the first eight tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following four tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at eighty per centum thereof in the ninth tax year and decreasing by twenty per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for renovation construction work in a renovation exemption area: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 8 Tax on 100% of exemption base
9 Tax on 80% of exemption base
10 Tax on 60% of exemption base
11 Tax on 40% of exemption base
12 Tax on 20% of exemption base
5-a. A recipient who, following the effective date of a certificate of eligibility, constructs a new building or structure that meets the requirements set forth in subdivision nine of section four hundred eighty-nine-dddd of this title in the new construction exemption area specified in paragraph (a), (b) or (c) of subdivision six of section four hundred eighty-nine-cccc of this title shall be eligible for an exemption from real property taxes as follows: For the first four tax years, the recipient shall be exempt from taxation on one hundred per centum of the exemption base. For the following four tax years, the recipient shall be exempt from taxation on a percentage of the exemption base beginning at eighty per centum thereof in the fifth tax year and decreasing by twenty per centum of said exemption base each year.
The following table shall illustrate the computation of the exemption for the construction of a new building or structure that meets the requirements set forth in subdivision nine of section four hundred eighty-nine-dddd of this title in the new construction exemption area specified in paragraph (a), (b) or (c) of subdivision six of section four hundred eighty-nine-cccc of this title: Tax year following effective date of certificate of eligibility: Amount of exemption:
1 through 4 Tax on 100% of exemption base
5 Tax on 80% of exemption base
6 Tax on 60% of exemption base
7 Tax on 40% of exemption base
8 Tax on 20% of exemption base
6. There shall be no exemption from or deferral of a payment of real property taxes available pursuant to this title to any person who performs commercial or renovation construction work in an excluded area, except as provided in paragraphs (b) and (c) of subdivision five of section four hundred eighty-nine-cccc of this title.
7. The benefits of this title shall be granted exclusively for industrial, commercial or renovation construction work described in approved plans. No benefits shall be granted for residential construction work. Any parcel which is partly located in an excluded area shall be deemed to be entirely located in such area.
8. No benefits pursuant to this title shall be granted for work which is the subject of a certificate of eligibility issued pursuant to title two-C of this article.