Local Option - Real Property Tax Exemption for Green Buildings

Summary

In July 2012 New York enacted legislation allowing municipal corporations to exempt green buildings from real property taxes. It is important to note that this law allows but does not require local governments to extend favorable property tax treatment to green buildings. In order for the exemption to apply, the taxing jurisdiction must first adopt this exemption.

In order to qualify for an exemption, the new construction or improvement (does not include routine maintenance or repairs) must commence on or after January 1, 2013; be valued in excess of $10,000; and projects must meet the LEED, Green Globes, American National Standards Institute, or substantially equivalent green building certification standards. Although the law references allowable green building rating systems/certifications other than LEED, the incentive amounts are described in relation to LEED certification levels. The amount of the exemption permitted varies by year and by the certification level achieved. Although not specifically identified in the law, it appears that the "year" refers to the property tax year in which the exemption is first claimed and subsequent years thereafter. The allowable exemption levels, stated in terms of the percentage of total taxes owed, are as follows:

Projects must actually achieve certification in order to be eligible for an exemption, and the exemption must be approved by the local assessor prior to taking effect.