Residential buildings reconstructed, altered
or improved subsequent to the effective date of this article for residential
purposes shall be exempt from taxation and special ad valorem levies
to the extent provided hereinafter. For the purposes of this article,
a "residential building" shall mean any building or structure designed
and occupied exclusively for residential purposes by not more than
two families.
Such buildings shall be exempt for a period
of one year to the extent of 100% of the increase in assessed value
thereof attributable to such reconstruction, alteration or improvement
and for an additional period of seven years; provided, however, that
the extent of such exemption shall be decreased by 12 1/2% of the
initial exemption each year during such additional period and provided,
further, that such exemption shall be limited to $80,000 in increased
market value of the property attributable to such reconstruction,
alteration or improvement, and any increase in market value greater
than such amount shall not be eligible for the exemption pursuant
to this section. For the purposes of this section, the market value
of the reconstruction, alteration or improvement shall be equal to
the increased assessed value attributable to such reconstruction,
alteration or improvement divided by the most recently established
state equalization rate.
An exemption granted pursuant to this article
shall cease in the event that a building granted an exemption ceases
to be used primarily for residential purposes or in the event that
title thereto is transferred to other than the heirs or distributees
of the owner.