BILL NUMBER: S9287
SPONSOR: HINCHEY
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to establishing a
real property tax exemption for certain full-time residents of certain
counties
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill authorizes a 10% property tax exemption, at local option and
with approval of an eligible county, for qualifying primary residences.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 creates a new real property tax law section 498 to:
Subdivision 1: Establish legislative intent.
Subdivision 2: Define terms related to eligible properties and counties.
Subdivision 3: Sets forth general provisions including authorization and
process for localities in eligible counties to offer 10% property tax
exemptions for eligible properties, pursuant to local law and with
approval of the county.
Subdivision 4: Sets forth requirements for property eligibility.
Subdivision 5: Sets forth further requirements for state and local
governments including related to data sharing, verification, and revoca-
tion processes.
Subdivision 6: Directs the department of taxation and finance to issue a
report on the impact of these exemptions.
Section 2 establishes the effective date.
 
JUSTIFICATION:
The availability of New York's housing stock has been decreasing over
the last decade in large part due to once primary homes turning into
short term and vacation rentals. In some localities, as many as half or
more of all housing units are now utilized as second homes, vacation
homes, or for other temporary or short-term purposes.
This trend not only reduces housing availability for people seeking
primary homes, it can also drive up expenses for full-time residents.
Local governments must figure out how to maintain local services, like
fire, EMS and education systems, even as the number of full-time resi-
dents decreases in favor of seasonal residents less likely to partic-
ipate in civic institutions like volunteer fire and ambulance companies
or to send their children to local school districts. Second, third and
fourth homes are also often renovated to serve as the perfect vacation
playgrounds for the wealthy. This can drive up property assessments,
inadvertently skyrocketing tax costs for neighboring primary residents
who often do not have the level of disposable income to cover these
changes. For instance, in the Hudson Valley, there is currently a vaca-
tion home listed in a rural community for $90 million. The local coun-
ty's median household income is $81,000.
Existing real property tax law does not adequately distinguish between
full-time, year-round occupied properties and seasonal or temporary
residences. Recognizing the impact of seasonal housing, over a dozen
states have moved to distinguish among these categories in their proper-
ty tax structures. For example, Georgia, Iowa, Minnesota, and several
other states offer percentage or flat-dollar exemptions applicable only
to owner-occupied homes, with some counties offering larger add-ons than
their base rates; Arkansas offers a state-funded credit applied to the
tax bills of owner-occupants only; and Alaskan municipalities may exempt
up to $50,000 of a primary residence's value pursuant to local law.
Consistent with the goals of those rules, this bill permits localities
in eligible counties, with county approval, to enact local laws author-
izing property tax exemptions of 10% of the assessed value for owner-oc-
cupied primary residences. The bill also includes a report after five
years to review the impact of the program. This will encourage use of
property for primary residency, while maintaining flexibility for local
governments who may choose or not choose to participate, and ultimately
provide data to the state to better understand whether such incentives
should be expanded beyond the initially participating areas.
 
PRIOR LETISLATIVE HISTORY:
New bill
 
FISCAL IMPLICATIONS:
None to the state
 
EFFECTIVE DATE:
Immediate, provided that it shall apply to assessment rolls prepared on
the basis of taxable status dates occurring on or after the first Janu-
ary 1 that is at least ninety days following the date on which this act
shall have become a law.