Second Department Rejects Appraiser’s Exclusion of Non-Exempt Comparable Sales
Selection of comparable sales is one of the most heavily litigated elements of any real property tax assessment or eminent domain challenge that relies on the sales comparison approach. A recurring mistake, recently addressed by the Second Department in Matter of Goldiron Farming, LLC v. Town of Stanford, 249 A.D.3d 876 (2d Dep’t 2026), is treating a distinguishing feature of the subject property as grounds to exclude an otherwise comparable sale from the data set altogether. The court’s decision confirmed the correct approach is not exclusion but adjustment: an appraiser should identify sales that are genuinely comparable in their relevant market and then adjust each one, up or down, for material differences between it and the subject property. Narrowing the pool of comparables to only those sharing a specific attribute of the subject, in this case, qualifying for a narrow tax exemption, risks distorting the analysis and undermining the appraisal’s reliability.
Background
The petitioner owned three contiguous parcels in the Town of Stanford totaling 322.36 acres, comprising a mix of agricultural land, conserved forestry land, and rural residences. Of that acreage, 225 acres were enrolled in the Real Property Tax Law (“RPTL”) § 480-a forest land tax program and received associated tax exemptions. The petitioner challenged the Town’s 2017 and 2018 assessments under RPTL Article 7. Both the petitioner and the Town retained appraisers who used the sales comparison approach, which was the focus of the decision.
The Two Appraisal Approaches
At trial, both parties relied on the sales comparison approach to determine the property’s value, but their appraisers diverged in two critical respects:
Petitioner’s Appraiser: The petitioner’s appraiser valued the property as a single economic unit with mixed agriculture, forestry, and residential uses. Critically, the appraiser narrowed his pool of comparable sales to consider only properties that held an RPTL § 480-a exemption. This restriction severely limited the universe of available comparables, forcing the appraiser to rely on sales of properties located in counties outside of Dutchess County—counties with lower overall per-acre values.
Town’s Appraiser: The Town’s appraiser also used the sales comparison approach but evaluated the property as three separate parcels rather than as a single economic unit and drew from a broader pool of local comparable sales not limited by RPTL § 480-a enrollment status.
The Comparable-Selection Defect
The Second Department’s principal criticism was directed at how the petitioner’s appraiser built his comparable set. Rather than drawing from the broader market of agricultural and forested properties in Dutchess County and adjusting for the presence or absence of a § 480-a exemption, the appraiser limited his selection of comparables to only those properties that also carried a § 480-a exemption. Because § 480-a enrollment is relatively uncommon, this filter pushed the appraiser outside Dutchess County entirely, and the resulting comparables came from counties with materially lower per-acre values than Dutchess County. The court treated this as a fundamental flaw: the exemption was a characteristic that called for a line-item adjustment, not a threshold requirement for inclusion in the data set.1
Hodgson Russ Insights
The court first applied the familiar RPTL Article 7 framework: a rebuttable presumption of validity attaches to the taxing authority’s assessment, and the taxpayer bears the initial burden of coming forward with substantial evidence of overvaluation. Here, the petitioner met that threshold, but once the presumption fell away, the court weighed the full record and found that the petitioner failed to prove overvaluation by a preponderance of the evidence, largely because of the comparable-selection and unity-of-use defects described above.
Comparable sales should be drawn from the relevant geographic market first; adjust for distinguishing features such as tax-exemption status, conservation restrictions, or PILOT arrangements rather than excluding sales that lack them. Where a subject property carries an RPTL § 480-a exemption, a conservation easement, or a similar encumbrance, document the adjustment methodology clearly, as courts will scrutinize whether the adjustment (rather than exclusion) was appropriate.
For questions regarding how this decision may affect pending or future RPTL Article 7 proceedings, please contact Daniel Spitzer, Henry Zomerfeld, Amy D’Ambrogio, or a member of the Hodgson Russ Real Property Tax Assessment and Eminent Domain Practice.
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1 The court identified two further problems with the petitioner’s appraisal. First, the appraiser disregarded the recent sale price of one of the parcels, incorrectly concluding that the sale was not an arm’s-length transaction. Second, the appraiser’s decision to value the parcels as a single economic unit was unsupported because the record did not establish a unity of use among them.