New York Enacts Legislation Authorizing Real Property Exemptions for Green Buildings.

New York Enacts Legislation Authorizing Real Property Exemptions for Green Buildings.

On July 18, 2012, New York Governor Andrew Cuomo signed Senate Bill 1462 into law authorizing a municipal corporation to provide a real property tax exemption for improvements to Leadership in Energy and Environmental Design (LEED) certified or other green initiative certified buildings. Municipal corporations will now decide whether to adopt the exemption. Companies considering construction of a potentially qualifying improvement should monitor local legislative activity to see whether the relevant localities have adopted the exemption and should start planning for construction projects scheduled for 2013.

Under the authorizing statute, the exemption would apply to construction projects beginning on or after January 1, 2013. Local law, however, may specify a later date. The exemption would be available only to the extent that the improvement increases the assessed value of the real property. To qualify, the real property improvement must be documented by a building report, and the value of the improvement project must exceed $10,000. Ordinary maintenance and repair projects will not qualify as eligible improvement projects.

For property that is certified by an accredited LEED professional as meeting the certified, silver, gold, or platinum designations, the exemptions are equal to 100% of the increase in assessed value as a result of the improvement in the first year. The exemption is gradually phased out over ten years, with 20% exempted for platinum buildings in year ten and no exemption in year ten for certified, silver, and gold buildings. The LEED professional must file a copy of the LEED certification with the local Assessor’s Office, and the Assessor must approve the certification.

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Engineered Tax Services

Engineered Tax Services

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