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New York Property Tax Monitor Property taxation, assessment, valuation by local governments throughout New York State

Avoiding Property Taxes in New York: Exemptions and Abatements in the News

Posted in Court Decisions, Property Tax Exemptions, Property Tax News, Property Tax Trends

Property taxes throughout New York State may be among the highest in the nation, but there is no shortage of properties that escape taxation.  Legally.  And in a sign of the times, exemptions, abatements and creative (and often controversial) agreements to take properties off the tax rolls are in high demand.

A recent post to this blog highlighted the adoption of the Green Buildings property tax exemption.  This is only one of the most recent additions to a long list of New York State exemptions that include such standards as affordable housing, pollution control, senior citizens, agricultural, veteranseducational, religious, and charitable.  More unique opportunities to save taxes include exemptions for bank branches, crime victims, greenhouses, horse racing (and the related “manure-handling“), fallout shelters, silos, and wind power systems, among many others.

Many communities throughout the state are virtually throwing exemptions and temporary incentives at owners in an effort to turn around the effects of New York’s dramatic population loss and housing blight.  Commenting on a program that will offer tax breaks for a local reconstruction program that was recently approved by Albany, Lori Szewczyk, director of community development for the upstate Town of Evans, said, “we’re not looking at this being a cure-all, but a tool we can use to revitalize the neighborhoods and improve our housing stock and encourage new investment.”  The Buffalo-area program is intended to encourage homeowners to add value to their property in exchange for a temporary delay in an assessment increase.

Property taxes, which are a chief reason for New York’s population drain and corporate departures, are now seen as an opportunity to stimulate economic development.  Notably, offering exemptions and corporate tax breaks does not address skyrocketing municipal and school budgets, or New York’s heavy layering of governments and duplications of services and, in the short term, pushes the tax burden on to the rest of the community. 

Tax exemptions are occupying more court attention as well, sometimes highlighting the most unusual applications.  This month, following a hard-fought battle that included twists and turns and was widely reported, Supreme Court Judge Richard M. Platkin agreed with the Town of Catskill in denying a religious exemption to the world headquarters of the Cybeline Revival, a pagan group. 

Corporate owners and occupiers are experiencing more success in obtaining tax breaks.  The Darien Lake Theme Park, a large water park with thrill rides and a hotel, was just given a $719,000 tax exemption by the Genesee County Economic Development Center as part of an incentive package related to the park’s attempts to refinance its $57.5 million mortgage.  Corporations are aggressively pursuing off-tax-roll contracts with municipalities that result in substantial tax savings.  A small sampling of the payment in lieu of taxes contracts that have been signed in very recent months include: the Mall at Greece Ridge (Rochester area) in connection with the shopping center’s redevelopment efforts; an award of nearly $1 million by the Saratoga County Industrial Development Agency to promote the development of an $18 million movie theater complex, including a 10-year full and partial property tax abatement; and a 20-year property tax abatement from the Nassau County Industrial Development Agency for the $93 million Winston and Churchill apartment complexes.

Such agreements, while not unusual, appear to be occurring with greater frequency lately.  This is no doubt in part because the desperation for economic activity many communities are now experiencing has squelched the typical charges of “corporate welfare” these agreements usually draw.  With most agreements running between 10 and 20 years, time will tell whether they resulted in the desired economic effect.

  • Larry W. Boes

    Haven’t studies been published on the positive and negative effects of tax abatements granted by local and state IDA’s?