Politicians often offer empty promises about tax relief – but don’t despair, there are ways you can actually get tax relief for yourself. There are many programs available to ease the real estate tax burden for individual unit-owners. Often, an opportunity to cash in on such benefits is missed by boards and shareholders/unit-owners. All of these (except for the New York City rebate) are paid by credits against real estate taxes due or a reduction in the actual taxes to be paid. It can seem confusing and take a little time to apply, but the cumulative benefits are worth the effort.
Programs where you as an individual can benefit directly from such tax relief include:
New York City Co-op and Condo Property Tax Abatement. Available to eligible co-op.condos, this abatement can be applied for annually by February 15 for everyone in the development. Eligibility is determined as of January 5 of each year, when a unit must be used as a residence, the resident cannot own more than three units in the same development, and the development cannot benefit from any other tax exemption program, such as Mitchell-Lama 421(a) or J-51. The co-op.condo abatement is paid as a credit against real estate taxes – the resident does not receive a check from the Department of Finance (DOF). In a cooperative, the board credits it on the maintenance bill, or, in rare cases, issues a check. Under the law, the board must credit the co-op.condo abatement to a shareholder/unit-owner but can apply the credit in the same month that an assessment or surcharge for other purposes is imposed. If the resident is a new owner, he or she should contact management and provide name, social security number, previous owner’s name, amount paid for the unit, and the date of sale.
New York City Rebate. In 2007, New York City provided a $400 rebate to owners of cooperatives and condominiums used as their primary residence. The only requirements: they had to have been the owner of record on September 1, 2007, and all property tax payments had to be current as of July 1, 2007. If you received a STAR exemption or any other state-sponsored individual tax relief in 2007, you were qualified for this rebate and received a check in October from the DOF. You can verify the status of your rebate with the DOF.
New York State School Tax Relief Program (STAR). This program lowers real estate taxes for owner-occupied primary residences. There are two levels of STAR: basic (no age or income restrictions) and enhanced (owner must also be 65 years of age or older and total annual income of all owners must, in metropolitan New York City, be less than $120,000). Shareholders/unit-owners can only receive one STAR exemption for one apartment. If a resident owns multiple apartments, for example, he or she cannot receive a STAR exemption on more than one of them. However, if you co-own an apartment and only one of you uses the apartment as a primary residence, you can still receive a STAR exemption.
To apply, you can request an application be mailed to you by calling 311 or by printing it from the NYC.gov/STAR website. You do not need to reapply for the basic STAR exemption every year; but once you turn 65, you will have to apply for the enhanced STAR exemption and recertify your income each year. All applications must be received prior to January 5 for the tax year beginning July 1 of that same year. That means if you submit your application by January 3, 2008, you will receive the STAR exemption for the tax year starting July 1, 2008. You cash in by receiving a credit against real estate taxes. If you own a co-op, all STAR exemptions are credited to the co-op and a breakdown of the STAR exemption by unit is provided to the co-op in November of each year, after which the shareholders may be credited on their maintenance bills or issued a check by the co-op.
New York State Veteran’s Exemption. A qualified veteran (or in some cases a veteran’s spouse, child, or parent) is entitled to a 15 percent exemption on real estate taxes for a primary residence, with additional exemptions if the veteran served in a combat zone or was disabled. A qualified veteran is a person who served in certain periods of conflict or war – the Persian Gulf, Vietnam, Korea, World War II, or World War I. The Iraq conflict has not yet been added to the list.
New York State Senior Citizen Homeowner’s Exemption (SCHE). If you are 65 years or older, and your federal adjusted gross income minus unreimbursed medical expenses is less than $35,500, you may qualify for a reduction in the assessed value of the unit by five to fifty percent. When the assessed value is reduced, the total tax bill is automatically reduced as well.
New York State Disabled Homeowner’s Exemption. Certain low-income homeowners who are disabled may qualify for a reduction in the assessed value of the unit by five to fifty percent as well.
The DOF has made it easy to apply for the various New York State/City-sponsored abatements and exemptions by creating one form called “Exemption and Abatement Application for Owners,” which is available at www.nyc.gov or by calling 311. This form must be filed by March 15 of each year.
Since the burden of applying for the co-op.condo abatement falls on boards and managing agents, most maintain spreadsheets and use computer programs to track the status of unit eligibility and ownership. Each year, this information is checked and updated between January 5 and February 15. Cooperatives also have to keep track of the units receiving other tax benefits, like STAR and veteran’s exemption, or SCHE since these, too, must be credited back to the shareholder/unit-owner during the tax year, although it is up to the individuals to apply for them. A practice that is becoming more common is for buildings to send reminders in late January to residents with copies of the form attached, and to offer assistance to the elderly who often find completing the form difficult or confusing. Boards can establish a committee to work with management in assisting people with their applications for these benefits.
With a little effort and a few memos, boards can ascertain that everyone gets some tax relief.