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Section 485-b of the New York Real Property Tax Law provides the basis for a 50% reduction of the increase in assessed value due to certain qualifying new construction, alterations, installations, or improvements for the purpose of commercial, business, or industrial activity, thus reducing real property taxes and some ad valorem assessments.  Filing an application is required to obtain the exemption, which commences the first tax year after a Certificate of Occupancy has been issued.  The 50% reduction abates at the rate of 5% per year over a period of ten years.  A proper filing and cost allocation analysis can maximize the savings to the taxpayer from the exemption.

State law allows local municipalities to opt out of the exemption or to modify the formula. There are local laws in the Hudson Valley taking advantage of those options.

If you are planning commercial construction, you should investigate these benefits early in the planning and approval process. You should also carefully select the timing of obtaining your Certificate of Occupancy and filing your application to maximize the available benefits.

At J&G Law, we have assisted many of our clients with their Section 485-b exemption application filings.

Please contact us with any questions or for assistance in planning applications.

This is not intended to be legal advice.  You should contact an attorney for advice regarding your specific situation.

Kara Cavallo is a Partner with the firm and practices Tax Certiorari, Litigation & Appeals, State and Federal Appellate Practice and Trial Practice. She can be reached by phone at 845-764-9656 and by email.

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