How to Adopt Existing Real Property Tax Laws
New York State Real Property Tax Laws (RPTLs) offers municipalities several opportunities to adopt local tax exemptions that provide housing-related benefits that include:
- Encouraging the creation of new housing units.
- Lowering the barrier to entry for first-time homebuyers.
- Lowering housing-related costs for certain populations.
- Encouraging building improvements and increasing housing quality.
All four of these RPTLs can be adopted through the passage of a local law. There are no actions or approvals needed from the state or any other authority to adopt these policies.
Residential-Commercial Urban Exemption Program (RP-485-a) – Conversion of a Non-Residential Property into a Mix of Residential and Commercial Uses
Description: A tax break designed to incentivize the rehabilitation of underutilized commercial buildings through conversion into mixed-used properties (residential and commercial).
Details: A 12-year tax exemption given for the increase in assessed value (the portion attributable to the conversion, not for ordinary maintenance and repairs) from a solely nonresidential use to a mix of residential and commercial uses. For the first eight years of the exemption, 100% of the increase (attributable to the conversion) in assessment is exempt from municipal tax. Thereafter, the exemption decreases by 20% a year (80% in year 9, 60% in year 10, 40% in year 11 and 20% in year 12). This exemption is transferrable to a new owner.
Eligibility: All municipalities in Ulster County are eligible to adopt this exemption. Upon adoption, non-residential privately-owned properties in the municipality are eligible.
Process: Municipalities must pass a local law to adopt this exemption. Upon adoption, private property owners can apply for the exemption using this link to form RP-485-a.
Residential-Commercial Urban Exemption Program
First-Time Homebuyers of Newly Constructed Homes (RP-457)
Description: A tax break for first-time homebuyers that purchase a newly constructed home or a home that has been substantially rehabilitated.
Details: A partial exemption from real property taxation for newly constructed or recently rehabilitated homes purchased by first-time homebuyers. The exemption can be implemented for a maximum of five years. The exemption begins at 50% of the tax the first year and steps down by every consecutive year: 40% in year 2, 30% in year 3, 20% in year 4 and 10% in the final year.
Eligibility: All municipalities in Ulster County are eligible to adopt this exemption. For the purposes of this exemption, a first-time homebuyer is defined as any person who has not owned a primary residence during the previous three years, and who does not own a vacation home or investment home. A newly constructed home is defined as a 1-and 2-family owner-occupied home that has not been previous occupied. First-time homebuyers that purchase a recently renovated home are also eligible for this exemption if the renovation costs exceed $3,000 and were contracted for within 90 days of the purchase date. The combined income of all the owners and their spouses cannot exceed the income limits defined by the State of New York Mortgage Agency (SONYMA).
Process: Municipalities must pass a local law to adopt this exemption. Upon adoption, private property owners can apply for the exemption using form RP-457.
First-Time Homebuyers of Newly Constructed Homes
Alternative Veterans’ Exemption (RP-458-a)
Description: A tax break for veterans and certain veteran family members.
Details: The exemption is for 15% of the total assessed value of residential property. An additional 10% exemption of the total assessed value is available for veterans who served in a combat zone. Maximum exemption amounts differ based on whether the veteran served during a wartime period, served in a combat zone, and/or suffered a service-related disability.
Eligibility: All municipalities in Ulster County are eligible to adopt this exemption. Upon adoption, eligible applicants are veterans, surviving spouses of veterans, and parents of veterans who died in the service (Gold Star Parents).
Process: Municipalities must pass a local law to adopt this exemption. Upon adoption, a veteran or qualified veteran family members can apply for the exemption using form RP-458.
Alternative Veterans’ Exemption
Capital Improvements to a One-or Two-Family Residential Property (RP-421-f)
Description: A tax break for single-family or two-family properties that experience an increase in assessed value as the result of alterations or improvements.
Details: A maximum 8-year exemption of the increase in the assessed value when a one-or two-family dwelling undergoes significant reconstruction, alterations or improvements. The increase in value must be attributable to the new capital improvements, not for ordinary maintenance or repairs. More than 50% of the square footage (after the reconstruction, alterations or improvements) must be at least five years old. 100% of the increase in assessed value is exempt from taxes in the first year; 87.5% in year 2; 75% in year 3; 62.5% in year 4; 50% in year 5; 37.5% in year 6; 25% in year 7; and 12.5% in year 8 – the final year. The exemption is limited to an $80,000 increase in market value. Eligibility: All municipalities in Ulster County are eligible to adopt this exemption. Upon adoption,one-or two-family property owners in the municipality are eligible. The value of the improvement to the property must exceed $3,000.
Process: Municipalities must pass a local law to adopt this exemption. Upon adoption, eligible property owners can apply for the exemption using the link to form RP-421-f
Capital Improvements Exemption
Minimum Criteria for adopting RPTLs
- Adoption of all four RPTLs identified above
- Adoption of at least one of the RPTLs identified above. For any RPTLs not adopted, a description of why this decision was made.