Lewisboro, NY homeowner says installing a heat pump shouldn’t increase her taxes
Homeowner in South Salem, NY, believes new heat pump should have no impact on taxes
Homeowner Elizabeth Ferran talks about the problems she experienced after installing a mini-split heat pump in her South Salem home on June 21.
Persistence paid off for homeowner Elizabeth Ferran in late June after the Lewisboro assessor reversed an increase in her home’s tax value because she installed a climate-friendly heat pump to heat and cool the ground floor of her home.
Now Lewisboro assessor Lise Richardson is waiting for the state’s opinion on whether installing a heat pump should increase a property’s tax value.
Richardson’s move marked the latest twist in a two-year saga for Ferran, who decided to install a mini-split air conditioner in her living room after her wall-mounted air conditioner gave up the ghost during a heatwave in 2022. Heat pumps, which run on electricity, are touted by environmentalists as a way to move away from fossil fuels like oil and natural gas.
Ferran, an art teacher at New Canaan Country School in Connecticut, said the mini-split air conditioner also improved the heating system in her 95-year-old home on Lake Kitchawan in South Salem, which at the time had an aging oil burner and electric baseboard heater installed.
The saga included a zoning exemption that took 18 months to obtain, a successful appeal to the state Department of Fire Protection, and Ferran’s June 17 appearance before the Lewisboro Board of Assessment Review.
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Richardson intervened in late June before the appraisal board ruled on Ferran’s complaint, which pointed to differences in New York’s property tax laws. Solar panels are exempt from property taxes in most municipalities, but state law is silent on heat pumps.
Richardson’s decision to reverse the increase came just days after she discussed the matter with Supervisor Tony Goncalves and explained her rationale for taxing Ferran’s heat pump in an interview with Tax Watch.
Now Richardson said she wants to get an opinion from the state Department of Revenue and Taxation before deciding whether to increase Ferran’s taxable value by $9,381, which is roughly the cost of the heat pump.
“We’re going to wait to hear from the state,” Robertson said. “This is the nicest and fairest thing we can do to help.”
The tax increase would have cost Ferran about $170 a year in property taxes.
Increase in value increases the valuation of a house
Under state law, appraisers are tasked with determining the market value of a home. The municipality’s tax rate is applied to that value to create a tax bill. Appraisers look through building permits for current information on work that has been done to a property that could increase its value.
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Appraisers say they typically do not increase the appraisal of a home that is retrofitted with an oil burner or natural gas boiler.
“You can’t penalize anyone for that,” said Ramapo appraiser Scott Shedler. “How does that change the value of your home?”
However, installing central air conditioning can increase the value and lead to an increase in the tax burden.
“Homes with air conditioning command higher sales prices,” Robertson said. “A central air conditioner or mini-split air conditioner can increase the value of a home.”
Ryan Cleveland, a spokesman for the New York Department of Finance and Taxation, said installing air conditioning can increase the value of a home, and heat pumps serve as both air conditioning and heating.
“As far as heat pumps are concerned, the appraiser has the authority to increase the appraisal value if he or she believes the heat pumps will increase the value of the property,” he said. “That’s probably case-by-case. For example, if a home without air conditioning is fitted with a heat pump, the appraiser may feel that this will increase the value more than if the existing heating and air conditioning system is replaced.”
Should heat pumps be treated like solar panels?
To assessors, heat pumps are different from solar panels installed on your roof. State law allows homeowners to claim an exemption for their panels to encourage clean energy, but some communities have opted out of this program, allowing assessors in those communities to add the taxable value of the panels.
In the Lower Hudson Valley, the value of your solar panels may be taxable if you live in the town of Patterson in Putnam County and four jurisdictions in Rockland: the cities of Orangetown and Ramapo, the village of Hillburn and the North Rockland School District, according to the state Department of Finance and Taxation.
All other jurisdictions in Westchester, Rockland and Putnam allow the solar panel exemption.
At the Board of Assessment Review, Ferran argued that taxing heat pumps in Lewisboro runs counter to the city’s goals of promoting alternative energy sources. She said her heat pump serves as a source of heat rather than cooling. Her main floor is heated with the unit from October to May. On some days in the summer, it is used to cool her home.
“The main reason I chose the expensive heat pump system was because I wanted to use less oil to heat my home,” she said. “The proposed tax increase penalizes the use of climate-friendly options while encouraging the use of fossil fuels. This tax assessment simply makes no sense, both functionally and legally, as there is no distinction in current law regarding heat sources and tax exemptions, apart from solar panels.”
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David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or email him at [email protected].
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