Taxation of Municipal Property Used for Public Purposes PDF Print E-mail

The Mandate: Pursuant to the Real Property Tax Law ยง 406, municipally-owned property that is used for municipal purposes but is located outside municipal boundaries, is generally subject to property taxation by any taxing entity in which the property is located. While there are a few exceptions to this provision based upon how the property is used, these exceptions require the approval of the municipality in which the property is located.

The Cost:  In January 2008, NYCOM conducted a Legislative Initiatives Survey to gather data on how current state statutes impact local governments, and more importantly, how changes to such statutes can help mitigate the fiscal challenges local officials face every day. Of the cities and villages that responded to the survey, 86 (67% of responding cities and 28% of responding villages) stated that their municipality pays property taxes for municipally-owned land located outside its boundaries.  Based upon the most recent local government data from the New York State Comptroller's Office, cities and villages pay approximately $19 million annually in property taxes on municipally-owned property.

The Solution: Legislation should be enacted that would grant exempt status to all municipally-owned real property used for public purposes, without regard to whether the property is located within the boundaries of the municipality owning the property.