The Kingston City School District has approved giving property tax exemptions for the development of new housing in the city. The School Board agreed to allow what are known as 421-P and 421-P*2 Tax Exemptions.
Kingston City School District Superintendent Paul Padalino said, “Lack of adequate proper housing has an impact on our entire community, especially our young people. These measures help ensure more families get access to a stable home, offering students a foundation for mental and emotional security, which is essential for academic success.”
State laws allowing the tax exemptions were put into effect last year but local municipalities and other taxing authorities such as school boards must have put their own rulings allowing the tax exemptions into effect.
The 421-P Tax Exemption for New Housing allows municipalities to exempt newly constructed or converted rentals properties with multiple dwelling units from property taxes. To qualify for tax exemption, the new structure must have 10 or more rental units and have been built on vacant or underutilized land. At least 25% of the units in the structure must be affordable to households between 60% and 80% of the Area Median Income (AMI), and none of the affordable units may have households earning more than 100% AMI. Local laws allowing the tax exemptions must be in effect. Construction must take place after the effective date of the local law. Qualifying properties receive a full exemption during construction (up to 3-years) and an additional 25-year period of decreasing exemptions for the improvements made (beginning with a 96% exemption in the first year after construction and then decreasing by 4% year thereafter).
The 421-P*2 Tax Exemption for New Accessory Dwelling Units allows municipalities to exempt newly constructed accessory dwelling units (ADU) from taxation for a 10-year period. To qualify for tax exemption, the attached or detached ADU must be a new unit that provides independent living facilities, as defined in the city’s form-based code. ADUs cannot be used as short-term rentals. Construction must take place after the effective date of the local law.
Kingston Mayor Steve Noble said, “I want to thank the School Board for passing this vital housing legislation, which will spur the creation of much needed housing. We set an ambitious goal of approving units 1,000 units of housing in Kingston by 2029, and we hope this will help us achieve that goal. This two-pronged legislation supports homeowners to create additional housing on their property as well as developers to build or redevelop larger housing projects.”
