Sunnycrest Apartments, Inc. v. Srogi

Judgment unanimously modified and, as modified, affirmed, with costs to petitioner, in accordance with the following memorandum: In this real property tax assessment proceeding under article 7 of the Real Property Tax Law the parties utilized the “band of investment” method of calculating the capitalization rate. The trial court based its calculation on an average mortgage interest rate of 10% and an expected rate of return on equity of between 7% and 10%, rates within the range of the trial testimony. The court correctly found a capitalization rate of 15.2% in accordance with the band of investment formula after necessarily converting the mortgage interest rate into an annual constant, adjusting for a return on equity of 8.5% and adding a tax factor of 4.2%. The city’s argument that the court erred in excluding stoves and refrigerators located in petitioner’s apartment from the taxable real property value is without merit. Personal property is not subject to ad valorem taxation (Real Property Tax Law, § 300), and section 102 (subd 12, par [b]) of the Real Property Tax Law, which defines real property for assessment purposes, does not express a legislative intent to change the nature of such personal property for tax purposes (see Matter of Crystal v City of Syracuse, Dept. of Assessment, 47 AD2d 29, 30, affd 38 NY2d 883; see, also, Madfes v Beverly Dev. Corp., 251 NY 12). However, the court improperly limited for a period of three years the right of petitioner to apply for a further reduction in taxes and the right of the city to adjust the property value without first seeking court approval (see Italiano v Srogi, 89 AD2d 1054). This decretal paragraph of the judgment must be deleted. (Appeal from judgment of Supreme Court, Onondaga County, Tenney, J. — Real Property Tax Law, art 7.) Present — Dillon, P. J., Doerr, Denman, O’Donnell and Schnepp, JJ.