Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

The redevelopment of vacant and blighted parcels has been a cumbersome, frustrating and, in many cases unsuccessful, process for municipalities and developers alike. Pennsylvania’s new land bank legislation could change all that. Philadelphia, with its own land bank legislation is poised to take advantage of the state legislation.

In October 2012, Governor Tom Corbett signed into law House Bill No 1682, enabling legislation, which opens the door for municipalities throughout the Commonwealth of Pennsylvania to establish land banks. Land banks create a vehicle to return vacant, abandoned or tax delinquent properties back to productive use. Over 75 municipalities throughout the United States have turned to land banks as means to battle blight, rebuild neighborhoods and spur economic growth.

Frequently, multiple agencies within a city, borough or township hold title to vacant, abandoned or tax delinquent properties, complicating procedures to deal with those parcels. In sharp contrast, a land bank serves as the central repository for such government-owned properties within its boundaries so as to better position them for redevelopment.

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All in favor of residential property tax relief, raise your hand! And, if you own an eligible home in the City of Philadelphia, apply now. The City is offering its residential homeowners the opportunity to apply for a Homestead Exemption. The Homestead Exemption would reduce the assessed value of an eligible home by $15,000 or more, and consequently lower the real estate taxes owed by the homeowner because the homeowner would pay real estate tax only on the reduced assessment.

Applications are due by July 31, 2012 in order to receive relief during the 2013 tax year. An exemption granted for any application received after July 31, 2012 will relate to the 2014 tax year. Once an exemption application is filed and approved, the homeowner does not need to reapply each year unless the deed for the property changes. There are no age restrictions or income restrictions for this opportunity. The Homestead Exemption only applies to the homeowner’s primary residence. The Office of Property Assessment determines whether a property is the homeowner’s primary residence, examining several factors, including the addresses on the homeowner’s federal tax filings, driver’s license and vehicle registration. Rental units and vacation homes are not eligible for this opportunity. If, however, a portion of the homeowner’s primary residence is used as a business or a rental property, an eligible property could still receive partial tax relief. The application form can be completed online. The form and additional information can be found on the City’s website. It is important to note that in order for the Homestead Exemption (and this real estate tax relief) to become effective, both the City and the Commonwealth of Pennsylvania will need to enact enabling legislation.

Alfred R. Fuscaldo is a Director in the Gibbons Real Property & Environmental Department.

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Crucial to New Jersey’s Five-Year Exemption and Abatement Law is the time within which an application for the tax exemption or abatement must be filed with the municipal tax assessor. A recent Tax Court of New Jersey decision provides the first published opinion interpreting a crucial provision of the statute used to calculate such period of time. Under N.J.S.A. 40A:21-16, written application for a tax exemption or abatement must be made to the municipal tax assessor within 30 days (including Saturdays and Sundays) following the completion of an improvement, conversion alteration, or construction on the property for which tax abatement or exemption is sought. The statute defines “completion” of a project as the date on which same is “substantially ready for the intended use”.

In Lowe’s Home Centers, Inc. v. City of Millville, decided last November, defendant City of Millville rescinded plaintiff’s tax abatement and exemption more than two years after it had been approved by the municipal tax assessor on the grounds that plaintiff’s application for the abatement and exemption was received by the tax assessor after the statutory deadline. The facts show that plaintiff constructed a retail store, together with infrastructure improvements that included sanitary sewer facilities, water lines and public street improvements, on property located in an area of rehabilitation. The construction was undertaken in accordance with a development agreement with the city and with the expectation that the property would receive a five-year tax exemption and abatement. A few days after the issuance of the certificate of occupancy for plaintiff’s project, the Millville tax assessor sent plaintiff a letter that incorrectly advised plaintiff that it had 30 days from the date of the letter within which to submit a completed application for the tax abatement and exemption. Plaintiff sent its application within the deadline set forth in the assessor’s letter, and also within 30 days from plaintiff’s soft opening for employees and family, which plaintiff stated was the date the building was completed. More than two years later, on the advice of a new tax assessor, Millville rescinded plaintiff’s tax abatement and exemption, claiming its application was late because it was not received within 30 days of the issuance of the certificate of occupancy for the project.

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