“Green Building” Tax Exemption Takes Effect in New York State January 1, 2013
On July 18th, 2012, New York State Governor Andrew Cuomo approved legislation that was unanimously passed by the New York State Assembly and Senate authorizing local governments and school districts to provide a real property tax exemption for construction projects which satisfy LEED* or similar certification standards for green buildings.
The legislation allows New York State tax jurisdictions to opt-in to the tax exemption under the Real Property Tax Law 470, by enacting local laws, resolutions or ordinances. Property Tax Law 470 provides a real property exemption for any increase in assessed value resulting from construction or reconstruction of property which satisfies LEED Standards.
To qualify for the exemption, the construction project (or reconstruction of a property) must have started on or after Jan. 1, 2013, be valued in excess of $10,000 and hold a valid building permit or other local approval. In addition, the jurisdiction where the construction project is located must have opted-in to the tax exemption.
The exemption varies depending on the level of LEED (or similar certification) achieved on the project, as follows:
- Platinum: 100% exemption for 6 years, decreasing 20% per year over a 4 year period
- Gold: 100% for 4 years, decreasing 20% per year over a 4 year period
- Silver: 100% for 3 years, decreasing 20% per year over a 4-year period
The exemption applies to both commercial and residential construction.
The exemption takes effect after certification has been filed with a local assessor.
*LEED is a green building rating system developed by the U.S. Green Building Council. Construction projects are awarded LEED certification points across five categories – sustainable sites, water efficiency, energy and atmosphere, materials and resources and indoor environmental quality. The more points a project accrues, the higher its certification. Levels include (from lowest to highest): Certified, Silver, Gold and Platinum. LEED Certification requires independent third-party verification.