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Green Buildings May Receive Tax Exemption Under New York Law

New York adopted a law in July that provides for local implementation of tax exemptions for improvements to property, in excess of ten thousand dollars, that obtain LEED(R) certification or meet a similar standard, based upon adoption of a local law implementing such a provision. To be eligible the construction must commence in or after January 2013 and the Statute provides for exemption, on a sliding scale, over ten years.

Chapter 188 of the Laws of 2012, which is the new section 470 of the New York Real Property Tax Law reads:

ยง 470. Exemption for improvements to real property meeting certif-
ication standards for green buildings. 1. Construction of improvements to real property initiated on or after the first day of January, two thousand thirteen, meeting LEED certification standards for green build-
ings as provided in this section, the green building initiative’s green globes rating system, the American National Standards Institute, or substantially equivalent standards for certification using a similar program for green buildings as determined by the municipal corporation,
shall be exempt from taxation by any municipal corporation in which such property is located to the extent provided in this section, provided the governing board of such municipal corporation, after conducting a public hearing, adopts a local law, ordinance or resolution providing therefor.
2. Such real property, or portion thereof, which is certified under a LEED certification standard for the categories of certified, silver,
gold or platinum as meeting green building standards, as determined by a LEED accredited professional shall be exempt as provided below for the respective percentages provided that a copy of the LEED certification for a qualified category is filed with the assessor’s office and is approved by the assessor as meeting the requirements of this section and the municipal corporation’s local law, ordinance or resolution. Such exemption shall be to the extent of any increase in assessed value resulting from the construction or reconstruction of a property meeting LEED certification.
LEED EXEMPTION YEAR CERTIFIED/SILVER GOLD PLATINUM 1 100% 100% 100%
2 100% 100% 100%
3 100% 100% 100%
4 80% 100% 100%
5 60% 80% 100%
6 40% 60% 100%
7 20% 40% 80%
8 0% 20% 60%
9 0% 0% 40%
10 0% 0% 20%

3. No such exemption shall be granted unless: (a) such construction of improvements was commenced on or after the first day of January, two thousand thirteen, or such later date as may be specified by local law;
(b) the value of such construction exceeds the sum of ten thousand dollars; and (c) such construction is documented by a building permit,
if required, for the improvements, or other appropriate documentation as required by the assessor. For purposes of this section the term “construction of improvements” shall not include ordinary maintenance and repairs.
4. If the assessor is satisfied that the applicant is entitled to an exemption pursuant to this section, he or she shall approve the applica-
tion and such real property shall thereafter be exempt from taxation by the municipal corporation as provided in this section commencing with the assessment roll prepared after the taxable status date. The assessed value of any exemption granted pursuant to this section shall be entered by the assessor on the assessment roll with the taxable property, with the amount of the exemption shown in a separate column.

-Steven M. Silverberg