§ 5-06 Tax Exemption/Tax Abatement Commencement: Duration and Amount.
RCNY § 5-06
(a)Tax Exemption.
(1)Except as provided in § 489(9) of the Real Property Tax Law, for a period of fourteen years, or thirty-four years if the eligible project was a moderate rehabilitation or a project eligible under 28 RCNY § 5-03(a)(9), any increase in assessed valuation of properties which receive a Certificate of Eligibility and Reasonable Cost shall be exempt from taxation on any increase in assessed valuation resulting from the certified reasonable cost of the alteration, improvement or conversion performed pursuant to the Act. If the conversion, alteration or improvement results in an increase in the gross cubic content of the building, the portion of the building which represents the additional cubic content shall not be exempt from any increase in assessed valuation. In the case of fourteen year exemptions, any increase in assessed value which results from an alteration, improvement or conversion shall be fully exempt for ten years and such exemption shall be reduced by twenty per cent (20%) in each succeeding year. In the case of thirty-four year exemptions, any increase in assessed value which results from an alteration, improvement or conversion shall be fully exempt for thirty years and such exemption shall be reduced by twenty per cent (20%) in each succeeding year.
(2)The land improved by a building with a Certificate of Eligibility and Reasonable Cost shall not be exempt from an increase in assessed valuation. An increase in assessed valuation resulting from an alteration, improvement or conversion other than one made pursuant to the Act shall not be exempt.
(3)Tax exemption shall commence on the first day of July following the commencement of tax abatement with the following exceptions: (i) If tax abatement commences on July first, tax exemption shall start at the same time; (ii) Tax exemption may commence on the first day of any tax quarter designated by the Office following the commencement of construction if the property is: (A) Aided by a loan made pursuant to Article 8, 8-a or 15 of the Private Housing Finance Law; or (B) Aided by a loan made pursuant to § 312 of the United States Housing Act of 1964 (42 U.S.C. § 1452b); or (C) Started after July 1, 1983 by a housing development fund company organized under Article 11 of the Private Housing Finance Law and carried out either (a) with substantial governmental assistance or (b) in a property transferred from the City where alterations and improvements are completed within seven years of the date of such transfer; or (D) Started after July 1, 1988 by or on behalf of a company not qualified under any of the above provisions, which is a not-for-profit corporation qualified pursuant to § 501(c)(3) of the Internal Revenue Code and which has entered into a regulatory agreement with the HPD requiring operation of the property as housing for low and moderate income persons and families; or (E) Started after July 1, 1992, and aided by a loan or grant under Article 11, 12 or 22 of the Private Housing Finance Law, § 696-a (Article 16) or § 99(h) of the General Municipal Law, or the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. §§ 12701 et seq.).
(iii)A Temporary Certificate of Eligibility may be issued in the discretion of the Office for projects eligible for tax benefits pursuant to 28 RCNY § 5-06(a)(3)(ii) above.
(b)Tax exemption limitation.
(4)Exception to Assessed Valuation Limitation to Allow Additional Affordable Housing Units.
(i)Notwithstanding the provisions in paragraph (1), the Office may reduce or remove the limitations on the exemption from taxation provided in such paragraph with respect to a particular property undergoing alteration or improvement, upon application of the property owner and a determination by the Commissioner that the increased benefit will increase the number of dwelling units that will be affordable to persons of low and moderate income, and the increased benefit is necessary to make economically viable units or to improve the quality of dwelling units that will be affordable to persons of low or moderate income.
(ii)As used in this paragraph (4), the term "persons of low or moderate income" shall mean persons who would qualify for housing subsidies pursuant to section two hundred thirty-five (§ 235) of the National Housing Act, as amended, at one hundred thirty-five percent (135%) of the income limitations provided therein. The term "affordable," when used in connection with persons of low or moderate income, shall mean that such persons shall not be required to spend more than thirty percent of their adjusted annual income for housing.
(iv)The Office will not approve any application under this paragraph (4), unless the owner enters into an agreement with the City which guarantees that at least thirty percent (30%) of the apartments in the building receiving tax benefits shall be rented or sold to persons of low or moderate income at rentals or carrying charges not exceeding thirty percent (30%) of their annual income, and that such apartments will, on vacancy, be re-rented or re-sold to persons of low or moderate income for a period of no less than fifteen (15) years. Such units must be rehabilitated or newly created units resulting from substantial rehabilitation or conversion.
(5)For purposes of this subdivision (b), the assessed valuation shall be the actual assessed valuation not transitional assessed valuation.
(6)Further exceptions to assessed valuation limit. The following conversions, alterations, and improvements are not subject to the limitations set forth in paragraphs (1) and (2) of this subdivision (b).
(7)Assessed valuation limits for projects commenced prior to June 1, 1986. Conversions, alterations and improvements commenced after September 15, 1983 and before June 1, 1986 are subject to the exemption limitations set forth in 28 RCNY § 5-06(b) whether they are located in Manhattan or in any other Borough of the City, unless they qualify under one of the exceptions to the assessed valuation limit set forth in 28 RCNY § 5-06(b)(6), or are located in a designated neighborhood preservation area, as listed in 28 RCNY § 5-06(d)(3)(iii)(C). For purposes of this subdivision (b), the Clinton neighborhood preservation area is exempt from the assessed valuation limits of 28 RCNY § 5-06(b) only for conversions, alterations and improvements commenced prior to June 28, 1988.
(c)Tax abatement.
(d)Tax abatement limitations.
(e)Restricted eligibility projects.
