Schenectady County Legislature considers tax exemptions

PHOTOGRAPHER: Michael Lamendola

Democrats in the Schenectady County Legislature want to enact two property tax exemptions they say will encourage residents to rebuild and improve homes.

The exemptions are allowed under New York state Real Property Tax Law sections 457 and 421-f and would take effect following approval of local laws.

Section 457, which the state Legislature adopted in June, provides partial property tax exemptions for six years on newly constructed homes purchased by income-eligible, first-time home buyers. Section 421-f provides property tax exemptions on home improvements up to a value of $80,000 for eight years.

The Democrat-controlled Legislature is expected to pass the local laws prior to the Nov. 8 General Election. Nine seats on the 15-member board are in play this election year. Democrats control seven seats in contention and five others for a total of 12. Republicans control two in contention. The 15th is held by a Conservative who caucuses with the Democrats.

If approved, both exemptions would apply to 2013 property tax rolls in the county. Residents could make improvements to their homes before rolls are finalized in March to become eligible for exemptions under Section 421-f.

Also, both exemptions would apply only to the county portion of the tax bill — unless municipalities and school districts adopt similar local laws. According to the state Office of Real Property Tax Services, only the city of Schenectady has adopted sections 421-f and 457, while Niskayuna has adopted Section 421-f. State records indicate the county adopted Section 421-f in 1994, but never implemented it through a local law.

Joe Hesch of the state Office of Real Property Tax Services said the city has granted 13 exemptions under Section 457, as of the 2010 tax roll. The exemptions total $566,000 on $1.7 million of total equalized value.

The city has granted exemptions on 16 properties under Section 421-f. The exemptions total $334,000 on total equalized value of $2.2 million. Niskayuna has no Section 421-f exemptions on record, Hesch said. “Either they have not granted the exemption to anyone, or if they have it has probably run out,” he said.

Majority Leader Gary Hughes, D-Schenectady, who is seeking re-election in District 2, said Democrats are proposing the exemptions to provide residents with maximum opportunities to save money in a tight economy. “It is critical to build the property tax base in the county right now, and we want to be able to say, ‘Here is a protection against an increase in assessment.’ ”

County Legislator Jeffrey McDonald, D-Schenectady, also seeking re-election in District 2, called the initiatives “mechanisms to help improve neighborhoods, especially in the city.”

McDonald said the proposed exemptions are a response to concerns raised by residents who said they are afraid to make improvements to their homes because they do not want to pay more taxes.

County Legislator Robert Hoffman, D-Schenectady, who is seeking a full term in District 1, said the exemptions will encourage both homeowners and landlords to make improvements, “because they will not be affected by a huge assessment immediately.”

“Our whole idea is to have some revitalization of the neighborhoods.”

Hoffman was appointed in June to fill a vacancy created when Democrat Vincent DiCerbo resigned.

Section 457 provides a 50 percent property tax exemption during the first year on newly purchased homes. The exemption then declines 10 percentage points each year until full value is reached in year six, according to the state. Also, to qualify for the exemption, households cannot exceed income limits defined by the State of New York Mortgage Agency’s low-interest mortgage program.

Under Section 421-f, the exemption totals 100 percent in the first year but applies only to the portion of the home’s value that is due to the improvement. The exemption then declines 12.5 percentage points each year until it reaches zero in year nine.