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RP-485-p-Ins

New York State Department of Taxation and Finance

Office of Real Property Tax Services

(4/12)

Instructions for Form RP-485-p

Application for Real Property Tax Exemption on

Commercial, Business or Industrial Property in an

Economic Transformation Area

(Real Property Tax Law, Section 485-p)

1. Authorization for exemption

Section 485-p of the Real Property Tax Law allows a county, city, town, village, or school district to

adopt a local law, ordinance or resolution providing a partial exemption from taxation and special ad

valorem levies (but not special assessments) for the construction, alteration, installation or

improvement of real property located within an economic transformation area (as designated by

Empire State Development (ESD)). The taxing jurisdiction must exercise this local option within

three years of the closure of a closed state-owned facility. (Closed state-owned facilities eligible for

this exemption include correctional facilities slated for closure by the governor between April 1,

2011, and March 31, 2012, and certain facilities operated by the Office of Children and Family

Services but subsequently closed by that office, and also as reported to ESD). The project owner

must meet the following eligibility requirements:

• The property must be used for business, commercial or industrial purposes, and owned by a

business entity that has received a certificate of eligibility from ESD.

• Construction of the project must begin within one year of the issuance of a certificate of

eligibility.

• Costs attributable to ordinary maintenance and repairs are not eligible for the exemption.

• Completion of the project must be demonstrated by a certificate of occupancy.

2. Duration and computation of exemption

If the exemption is locally authorized, the exemption benefit depends on the property’s location. For

projects located on or at the site of a closed facility, the exemption starts at 50% of the increase in

assessed value (the base amount) attributable to the construction, alteration, installation or

improvement in the first year of a five-year benefit, and declining by 10 percentage points in each

succeeding year. If the project is located outside a closed facility but within an economic

transformation area, the exemption benefit instead starts at 25% of the base amount in the first year

of a five-year term, declining by five percentage points in each succeeding year. The base amount

of the exemption remains constant throughout the authorized term unless there is: 1) subsequent

construction, alteration or improvement during the exemption term (where the assessor will revise

the base amount to include the increase in assessed value attributable to these subsequent

projects); or 2) a change in the level of assessment for an assessment roll of 15% or more, as

certified by the Office of Real Property Tax Services (where the assessor will adjust the base

amount by such change in the level of assessment).

This exemption may not be granted concurrently with or subsequent to any other property tax

exemption with respect to the same project, except that a subsequent exemption may be granted

where, during the period of a previous exemption, payments in lieu of taxes or other payments were

made to a local government in an amount equal to or greater than the amount of taxes that would

have been paid on the improvements had the property been granted an exemption pursuant to

RPTL §485-p. In that case, the property may be eligible for a §485-p exemption for a period of five

Instructions For Form Rp-485-P - Application For Real Property Tax Exemption On Commercial, Business Or Industrial Property In An Economic Transformation Area

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