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RP-457-Ins

New York State Department of Taxation and Finance

Office of Real Property Tax Services

(4/13)

Instructions for Form RP-457

Application for Real Property Tax Exemption for

First-Time Homebuyers of Newly Constructed Homes

(Real Property Tax Law, Section 457)

Authorization for exemption

Section 457 of the Real Property Tax Law authorizes a partial exemption from real property taxation for

“newly constructed homes” purchased by “first-time homebuyers.” Counties, cities, towns, and villages

may hold public hearings and then adopt local laws granting the exemption. School districts, other than

those in the cities of New York, Buffalo, Rochester, Syracuse, and Yonkers, have the option to hold

hearings and pass resolutions providing that the exemption applies to school taxes.

Eligibility for exemption

For purposes of this exemption, a “first-time homebuyer” is any person who has not owned - and whose

spouse has not owned - a primary residential property during the previous three years, and who does not

own a vacation or investment home. A qualifying “newly constructed home” is a one- or two-family

residence, townhouse, or condominium, which was constructed after November 28, 2001, is owner-

occupied, and was not previously occupied. The exemption also applies to a renovation or remodeling of

an existing home purchased by a first-time homebuyer, provided the renovation or remodeling costs

exceed $3,000 and the contract for the work is contracted for within 90 days from the date of purchase.

Eligibility for the exemption also depends, in part, on the homebuyer's income and the purchase price of

the home. The “household income” (defined as the total combined incomes of all of the owners and their

resident spouses) may not exceed the income limits established by the State of New York Mortgage

Agency (SONYMA) and in effect on the contract date for the purchase and sale of the property for its low

interest mortgage program in its non-target, one and two person household category for the county where

the property is located. The purchase price of the home is similarly limited, with two exceptions:

(1) municipalities opting into the program may increase the purchase price limit by up to 25%, and

(2) where the purchase price exceeds the applicable limit by 15% or less, the exemption may be granted

as if the purchase price equaled the applicable limit (but otherwise no exemption may be granted). The

applicable SONYMA limits are available on that agency’s Web site ( ).

SONYMA may also be contacted at 641 Lexington Avenue, New York NY 10022 or by telephone (toll

free) at 1 800 382-4663.

“Income” for purposes of this exemption is defined as the “adjusted gross income” for federal income tax

purposes as reported on the applicant’s latest available federal or state income tax return, subject to any

subsequent amendments or revisions, reduced by any taxable amounts of distributions from individual

retirement accounts or individual retirement annuities (IRAs). A copy of the income tax return(s) must be

filed with the application.

Scope and duration of exemption

The exemption, if authorized, lasts for a maximum term of five years, beginning at fifty percent in the first

year and declining to ten percent in the fifth and final year. A municipality that opts in to the program may

also opt to grant the exemption for a shorter term. Where it is adopted, the exemption applies to taxes

and special ad valorem levies; the exemption does not apply to special assessments. The exemption

applies only to homes purchased or contracted for before December 31, 2016.

Instructions For Form Rp-457 - Application For Real Property Tax Exemption For First-Time Homebuyers Of Newly Constructed Homes

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