In late June, her persistence paid off for homeowner Elizabeth Ferran, after the Lewisboro assessor revoked an increase in her home’s tax value because she installed a climate-friendly heat pump to heat and cool the main floor of her house.
Now Lewisboro Tax Assessor Lise Richardson is waiting for the state’s ruling on whether adding a heat pump should result in a higher home appraisal.
Richardson’s move marked the latest twist in a two-year saga for Ferran, who decided to install a mini-split in her living room during a 2022 heat wave after her wall-mounted air conditioner broke. Heat pumps, which run on electricity, have been promoted by environmentalists as a way to transition away from fossil fuels like oil and natural gas.
Ferran, a visual arts teacher at New Canaan Country School in Connecticut, said the mini-split also improved the heating system in her 95-year-old home on Lake Kitchawan in South Salem, which at the time had an old oil furnace and electric baseboard heater.
The saga included a zoning exemption that took 18 months to obtain, a successful appeal to the State Department’s fire safety division and Ferran’s appearance before the Lewisboro Board of Assessment Review on June 17.
Energy: Con Edison’s popular heat pump program costs money and leads to violations
Richardson intervened in late June, before the review board ruled on Ferran’s complaint, which highlighted disparities 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 decided to rescind the increase just days after discussing the issue with Supervisor Tony Goncalves. In an interview with Tax Watch, she explained why she wanted to tax Ferran’s heat pump.
Richardson would now like an opinion from the Department of Taxation and Finance before deciding whether to add $9,381 to Ferran’s taxable value, roughly equivalent to the cost of the heat pump.
“We’re waiting to hear from the state,” Robertson said. “It’s the nicest and most honest thing we can do to help.”
The property tax increase would cost Ferran about $170 a year.
Adding value increases a home’s valuation
Under state law, appraisers are charged with determining a home’s market value, applying the city’s tax rate to the value to create a tax bill. Appraisers look to building permits for updates on work done on a property that could increase its value.
Money: In the face of growing outrage, Lewisboro bans sale of municipal land to the supervisor’s secretary
Appraisers say they typically won’t increase the appraisal for a home that replaces an oil-burning stove or a natural gas boiler.
“You can’t punish someone for doing that,” Ramapo Assessor Scott Shedler said. “How does that change the value of your home?”
But installing central air conditioning can increase value, and those improvements can lead to a higher appraisal.
“Homes with air conditioning sell for more,” Robertson said. “Central air conditioning or a mini-split can increase the value of a home.”
Ryan Cleveland, a spokesman for the New York Department of Taxation and Finance, said adding air conditioning can increase a home’s value and that heat pumps can serve as both an air conditioner and a heater.
“With heat pumps, if the appraiser feels that the heat pumps increase the value of the property, then the appraiser has the authority to increase the appraisal,” he said. “It’s probably a case-by-case basis. For example, if a home doesn’t have air conditioning but has a heat pump, then the appraiser might feel that the value increases more than if it were to replace the existing heating and air conditioning.”
Should heat pumps be treated like solar panels?
To appraisers, heat pumps are different from solar panels on your roof. State law allows homeowners to apply for an exemption for their panels as a way to promote clean energy. However, some municipalities have opted out of that program, so appraisers in those municipalities can add tax value for the panels.
In the Lower Hudson Valley, the value of your solar panels may be taxed if you live in the Putnam County town of Patterson 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 Taxation and Finance.
All other jurisdictions in Westchester, Rockland and Putnam allow the solar panel exemption.
At the Board of Assessment Review, Ferran argued that Lewisboro’s heat pump tax conflicts with the city’s goal of encouraging alternative energy sources. She said her heat pump functions more as a heating source than a cooling source, heating her second floor from October through May. It’s used to cool her home on some days in the summer.
“My main reason for choosing the expensive heat pump system was to reduce my oil consumption when heating my home,” she said. “The proposed tax increase penalizes the addition of climate-friendly options, while at the same time encouraging the use of fossil fuels. This tax bill simply makes no sense, both functionally and legally, as the current legislation makes no distinction regarding heating sources and exemptions, except for solar panels.”
Sign up for Wilson’s weekly newsletter for insights into his Tax Watch columns.
David McKay Wilson writes about tax issues and government accountability. Follow him on Twitter @davidmckay415 or send him an email at dwilson3@lohud.com.
This article originally appeared on Rockland/Westchester Journal News: Lewisboro, NY homeowner says adding a heat pump shouldn’t increase her taxes
