Last summer, New York State passed enabling legislation that authorized local governments to provide a real property tax exemption for new green building or renovation projects constructed after January 1, 2013 by local law, ordinance, or resolution. Now, the Village of Sag Harbor on Long Island is one of the first municipalities in the Empire State to offer the exemption after its Village Board of Trustees adopted Local Law No. 4 of 2013 in early September. Sag Harbor appears to be the first in the New York City metropolitan area to authorize the exemption; the City of Oneonta seems to be the only other municipality that has followed suit to date.
Local Law No. 4 mirrors the state-level enabling legislation, which we discussed last summer here at gbNYC+. It provides for an exemption of up to $1 million (Sag Harbor is incorporated within the Towns of East Hampton and Southampton) to the extent of any increase in assessed property value resulting from more than $10,000 in construction or reconstruction that earns LEED, Green Globes, or other “substantially equivalent” green building certification. Actual certification is required and must be filed with the local tax assessor’s office in order for the exemption to be entered on the municipality’s tax assessment roll. Routine maintenance or repairs will not qualify.
Depending on the certification level, commercial, residential, or multi-family property owners can receive up to a 100-percent annual tax exemption. (For example, if a project earns LEED Silver, the full value of the exemption will be available for three years until phasing out in 20-percent increments by year 8. On the other hand, for qualifying LEED Platinum projects, the 100-percent exemption will last for six years before decreasing by 20-percent per year until phase-out in year 11. Similarly, for LEED Gold, the full exemption lasts through year 4 until decreasing by 20-percent annually until phasing out completely in year 9.)
The enabling state-level legislation (found at Section 470 of New York’s Real Property Tax Law) was authored by Assemblyman Fred W. Thiele, Jr. of (not surprisingly) Sag Harbor and State Senator Ken LaValle. The legislation was approved unanimously by the State Assembly (140-0) and Senate (59-0) and signed into law by Governor Cuomo last July. It is important to note that the legislation simply empowers municipalities to offer the exemption, which they must authorize through their own legislation, like Sag Harbor.