STATE OF NEW YORK ________________________________________________________________________ 234 2025-2026 Regular Sessions IN ASSEMBLY (Prefiled) January 8, 2025 ___________ Introduced by M. of A. MAGNARELLI -- read once and referred to the Committee on Real Property Taxation AN ACT to amend the real property tax law, in relation to the certif- ication of certain property complying with the residential-commercial urban exemption program and the revocation of benefits of such program in certain circumstances The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 485-a of the real property tax law, as amended by 2 chapter 132 of the laws of 2021, is amended to read as follows: 3 § 485-a. Residential-commercial urban exemption program. 1. Defi- 4 nitions. As used in this section, the following terms shall have the 5 following meanings: 6 (a) "Municipality" means any town, city or village except for a city 7 having more than one million inhabitants. 8 (b) "Applicant" means any person obligated to pay real property taxes 9 on the property for which an exemption from real property taxes under 10 this section is sought. 11 (c) "Commercial construction work" means the modernization, rehabili- 12 tation, expansion or other improvement of the portion of mixed-use prop- 13 erty to be used for commercial purposes. 14 (d) "Commercial purpose or use" means [(i)] the buying, selling or 15 otherwise providing of goods or services directly to the public[; or 16 (ii) a non-residential lawful use including, but not limited to, an 17 office, hotel, retail store, brewery, distillery, restaurant, cafe, bar 18 or tavern, gymnasium, theater, or entertainment venue which employs or 19 is anticipated to employ a minimum of five employees primarily at the 20 mixed-use property for which an exemption under this section is sought], 21 including hotel services, retail stores, office space, restaurants, 22 bars, gyms, theaters, and cafes. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00804-01-5
A. 234 2 1 (e) "Mixed-use property" means property on which will exist, after 2 completion of residential construction work or a combination of residen- 3 tial construction work and commercial construction work, a building or 4 structure used for both residential and commercial purposes of which, at 5 least [forty] fifty percent of the building or structure's square 6 footage is devoted to residential purposes or use and at least fifteen 7 percent of the building or structure's square footage is devoted to 8 commercial purposes or use. Only square footage existing in a story 9 above grade shall be used in the determination of the building's 10 percentage of residential purposes or use and commercial purposes or 11 use. 12 (f) "Person" means an individual, corporation, limited liability 13 company, partnership, association, agency, trust, estate, foreign or 14 domestic government or subdivision thereof, or other entity. 15 (g) "Residential construction work" means the creation, modernization, 16 rehabilitation, expansion or other improvement of dwelling units, other 17 than dwelling units in a hotel, in the portion of mixed-use property to 18 be used for residential purposes. 19 (h) "Story above grade" means any story having its finished floor 20 surface entirely above grade. 21 (i) "Grade" shall mean the finished ground level adjoining the build- 22 ing at all exterior walls. 23 (j) "Floor area" means the horizontal areas of the several floors or 24 any portion thereof of a mixed-use property measured from the exterior 25 faces of exterior walls or from the center line of party walls, exclu- 26 sive of any area existing below-grade. 27 2. Any municipality may, by local law, provide for the exemption of 28 real property from taxation as provided in this section. Upon the 29 adoption of such a local law, the county in which such municipality is 30 located may, by local law, and any school district, all or part of which 31 is located in such municipality, may, by resolution, exempt such proper- 32 ty from its taxation in the same manner and to the same extent as such 33 municipality has done. 34 3. Upon the adoption of such a local law, non-residential real proper- 35 ty, upon conversion to mixed-use property, shall be exempt from taxation 36 and special ad valorem levies as provided for in subdivision four of 37 this section. Land which was vacant prior to the residential or commer- 38 cial construction work for which a tax exemption is sought, shall not be 39 eligible to receive benefits pursuant to this section. 40 4. (a) (i) For a period of twelve years from the approval of an appli- 41 cation, the increase in assessed value of such property attributable to 42 such conversion shall be exempt as provided in subparagraph (ii) of this 43 paragraph. Such exemption shall be computed with respect to the 44 "exemption base". The exemption base shall be determined for each year 45 in which there is an increase in assessed value so attributable from 46 that of the previous year's assessed value. 47 (ii) The following table shall illustrate the computation of the tax 48 exemption: 49 Year of exemption Percentage of exemption 50 1 through 8 100% of exemption base 51 9 80% of exemption base 52 10 60% of exemption base 53 11 40% of exemption base 54 12 20% of exemption base
A. 234 3 1 (b) No such exemption shall be granted unless: 2 (i) such conversion was commenced subsequent to the date on which the 3 municipality's local law took effect; [and] 4 (ii) the cost of such conversion exceeds the sum of ten thousand 5 dollars or such greater amount as may be specified by local law[.]; 6 (iii) at least seventy-five percent of the floor area of the mixed-use 7 property consists of the pre-existing building or structure; and 8 (iv) the portion of the building used for commercial purposes is 9 currently, as demonstrated by documentation submitted by the applicant, 10 used as such or is in good faith contemplated. 11 (c) For purposes of this section the term conversion shall not include 12 ordinary maintenance and repairs. 13 (d) No such exemption shall be granted concurrent with or subsequent 14 to any other real property tax exemption granted to the same improve- 15 ments to real property, except, where during the period of such previous 16 exemption, payments in lieu of taxes or other payments were made to the 17 local government in an amount that would have been equal to or greater 18 than the amount of real property taxes that would have been paid on such 19 improvements had such property been granted an exemption pursuant to 20 this section. In such case, an exemption shall be granted for a number 21 of years equal to the twelve year exemption granted pursuant to this 22 section less the number of years the property would have been previously 23 exempt from real property taxes. 24 5. Such exemption shall be granted only upon application by the owner 25 of such real property on a form prescribed by the commissioner. Such 26 application shall be filed with the assessor of the municipality or 27 county having the power to assess property for taxation on or before the 28 appropriate taxable status date of such municipality or county. 29 6. If the assessor is satisfied that the applicant is entitled to an 30 exemption pursuant to this section, [he or she] such assessor shall 31 approve the application and such real property shall be exempt from 32 taxation and special ad valorem levies as in this section provided. The 33 assessed value of any exemption granted pursuant to this section shall 34 be entered by the assessor on the assessment roll with the taxable prop- 35 erty, with the amount of the exemption shown in a separate column. 36 7. (a) During the period of exemption pursuant to this section, the 37 owner shall submit an annual certification to the assessor attesting 38 that the property complies with the provisions or requirements of this 39 section and any additional provisions or requirements as may be provided 40 by local law. Failure to submit such certification shall result in revo- 41 cation of benefits. Such certification shall include at a minimum the 42 following: 43 (i) the types of residential use and the total above-grade square 44 footage [and below-grade square footage] of such use; 45 (ii) the types of commercial use and the total above-grade square 46 footage [and below-grade square footage] of such use; 47 (iii) attestation that the portion of the building used for commercial 48 purposes is currently, as demonstrated by documentation submitted by the 49 applicant, used as such or is in good faith contemplated [to be used as 50 such]; and 51 (iv) [the specific address of the entrance through which the public 52 enters the portion of the building used for commercial purposes; 53 (v) if the portion of the building intended to be used for commercial 54 purposes is not currently in active use for such purposes and open to 55 the public, the reasons why it is not currently being used for commer- 56 cial purposes and open to the public; and
A. 234 4 1 (vi)] all such other information required by the municipality. 2 (b) If the assessor is satisfied that the applicant continues to be 3 entitled to the exemption pursuant to this section, the assessor shall 4 approve the certification and the real property shall remain exempt from 5 taxation and special ad valorem levies for another year as provided in 6 this section. 7 8. (a) The benefits of this section shall be revoked upon a finding by 8 the assessor that: 9 (i) the application for benefits hereunder or the annual certification 10 required hereunder contains a false statement or false information as to 11 a material matter or omits a material matter; or 12 (ii) the eligible real property fails to comply with one or more of 13 the provisions or requirements of this section or any provisions or 14 requirements provided by local law[; or 15 (iii) the portion of the property devoted to commercial purposes has 16 not been in active use for commercial purposes and open to the public 17 for three consecutive years]. 18 (b) Such revocation shall require the repayment of any benefits previ- 19 ously granted pursuant to this section [for any year during which the 20 property was non-compliant or the application or annual certification 21 contained a false statement or false information as to a material matter 22 or omitted a material matter. 23 (c) No benefits may be revoked unless the applicant has been given 24 thirty days' notice of such revocation and has been given reasonable 25 notice to cure any failure to comply with the provisions of requirements 26 of this section]. 27 9. If the assessor determines that there was a material misstatement 28 in an application filed by or on behalf of the owners for an exemption 29 pursuant to this section and that such misstatement provided the basis 30 for the granting of such exemption, the municipality shall proceed to 31 impose a penalty on the applicant of one thousand dollars in addition to 32 recovering the amount of any prior exemption granted. 33 § 2. This act shall take effect January 1, 2026 and shall apply to 34 properties for which the initial application for exemption are received 35 on and after such date.